Recent Texas Cases of Interest to Cities

Note: Included cases are from May 11, 2018 through June 10, 2018.

Governmental Immunity: Wasson Interests, Ltd. v. City of Jacksonville, No. 17-0198, 2018 WL 2449184 (Tex. June 1, 2018). On June 1, the Texas Supreme Court handed down its second opinion in the Wasson v. City of Jacksonville (Wasson II) case.  The court held that the city’s contractual immunity was waived, highlighting the court’s willingness to expose cities to ever-greater liability.  In fact, the Texas Supreme Court’s erosion of governmental immunity, without a clear mandate from the Texas Legislature, may be unprecedented in our state’s history.

The case involved a 99-year lease between the City of Jacksonville and Wasson Interests, Ltd. (WIL) for lakefront property owned by the city. The lease contained a provision prohibiting commercial activity on the lots. (The city’s zoning ordinance expressly defines impermissible commercial activity.)

WIL rented the leased property to individuals for terms of a week or less, which is considered an impermissible commercial activity under the city’s zoning ordinance. The city sent eviction notices to WIL based on the continued commercial use of the property.

WIL filed suit against the city, and the case went all the way to the Texas Supreme Court.  The court struck its first blow against cities in its initial opinion (Wasson I) by holding that the governmental-proprietary distinction found in the Texas Tort Claims Act applies to contractual claims against a city.  A city is immune from liability for performing a “governmental function,” but can be subject to damages for a “proprietary function.”  (Governmental functions are things like police and fire service, utility service, zoning, etc. Proprietary functions are more akin to an action typically preformed by a private entity.)

The Texas Supreme Court sent the Wasson case back to the lower court to determine whether the City of Jacksonville was engaged in a governmental or proprietary function when it leased the lakefront property. The city won at the Tyler Court of Appeals, and WIL appealed. That’s when the Texas Supreme Court struck its second blow against city legal immunity. Overturning the Tyler Court of Appeals, the Texas Supreme Court’s Wasson II opinion holds that the City of Jacksonville was performing a proprietary function when it leased its lakefront property (i.e., held that the city’s contractual immunity was waived). Thus, WIL’s suit against the city for breach of the lease agreement may proceed.

Unemployment Compensation/Family Medical Leave Act: Texas Workforce Comm’n v. Wichita Cty., No. 17–0130, 2018 WL 2375140 (Tex. May 25, 2018). The question in this case arises at the intersection of the Texas Unemployment Compensation Act (Act) and the Family Medical Leave Act (FMLA).

On August 16, 2011, while employed by Wichita County as an assistant emergency management coordinator, White went on FMLA leave for severe anxiety and depression. After her paid leave ran out on August 19, she switched to unpaid leave, during which time the county continued to pay her health insurance premiums under the FMLA. White returned to work in November 2011, after the county made accommodations in light of her new medical restrictions.

In October, while on leave, White filed a claim for unemployment benefits with the Texas Workforce Commission. The county contested her claim and argued that, since White remained a county employee, she was not “unemployed” and thus, did not qualify for benefits. The commission dismissed the county’s argument, and determined that White did qualify as “unemployed.” The county appealed, arguing that White “never voluntarily left work, was never fired, was never laid off, and never left her employment.” In response, the commission affirmed its decision, stating that White was not disqualified from receiving benefits and that the county was required to reimburse the commission for any benefits it paid to White.

The county ultimately filed a petition for judicial review in district court. Both parties filed cross-motions for summary judgment. The trial court denied the commission’s motions, granted the county’s motion, and reversed the commission’s earlier decision. The court of appeals affirmed, concluding that “it would be ‘absurd’ for an individual to be entitled to unemployment benefits during FMLA leave.” The Texas Supreme Court granted the commission’s subsequent petition for review.

The Texas Supreme Court focused on the “unambiguous” language of the Texas Unemployment Act, citing the Act’s intention to benefit people who were unemployed. The court determined that the case centered on an interpretation of the Act regarding whether an individual qualifies as “unemployed” under the Act while taking unpaid leave from her job under the FMLA. The Act requires that, in addition to being unemployed, an individual must be “eligible” and they must not otherwise be excepted or disqualified.

In this particular case, the employee’s eligibility was not contested, and there were no exceptions or other disqualifications. Thus, the issue turned on whether the employee fit the necessary definition of “unemployed” as required by the Act. If an employee is considered “unemployed,” they would not automatically qualify for unemployment benefits under the FMLA based on their status, but they would not be disqualified because of a lack of a formal severance of the employee-employer relationship.

The commission argued that White was “unemployed” since she was not “performing services for wages.” The county argued that “unemployment” should be given its ordinary meaning – a complete and total severance of the employee-employer relationship. According to the county, since there was still a relationship between the employee and her employer, she did not qualify as “unemployed,” even though she was on unpaid leave.

The Texas Supreme Court agreed with the commission’s argument, stating that, despite the plain meaning of the term “unemployed,” the explicit definition of the term in the Act itself superseded any plain meaning. Specifically, the Act outlines that an individual may qualify for benefits if they can be “considered unemployed” and does not require that they actually be unemployed.

In another point, the county argued that such an interpretation renders other sections of the Act, wherein an individual can apply for FMLA leave, voluntarily leave their job, and still receive benefits, “meaningless.” The court rejected this argument, concluding instead that the county’s interpretation would render another section of the Act (Section 201.09(d)) as redundant.  There, the legislature clarified that an individual would not be considered unemployed if the employer reduced their hours as a result of misconduct, even though the reduction would otherwise qualify them for that descriptor. Thus, the court concluded that Section 201.09(d) would serve no purpose if severance of the employer-employee relationship were required.

In the second part of the opinion, the court began by noting that it can only disregard a statute with unambiguous language if it produces an “absurd” result, as per the conclusion reached by the court of appeals. The court of appeals determined that, under its interpretation of the Act, an individual would be entitled to both FMLA protection and unemployment benefits, an “absurd result.” The Texas Supreme Court disagreed with this characterization, again emphasizing that the question in the case is not whether an individual is entitled to unemployment benefits while on FMLA leave, but whether that individual fits the Act’s definition of “unemployed.” Again, the court pointed to other criteria an individual must fulfill to be considered for unemployment benefits, which protect against the idea of “entitlement.”

Finally, the court addressed a third argument the county made in its initial summary judgment motion, even though the point was not argued in the court of appeals or before the Texas Supreme Court. The county challenged the commission’s conclusion that the commission would bill the county for benefits paid to the employee. Even though a county must generally reimburse the commission for benefits properly paid to county employees, it argued that such reimbursement is improper where the benefits are paid to an employee who left work due to a medically-verified illness. The court concluded that the basis for the county’s argument, a provision in the Act detailing an exception to payment, was only applicable to contributory employers. The county, a reimbursing employer, was ineligible to receive the exception. Thus, the court dismissed the argument.

Ultimately, the Texas Supreme Court held that the definition of “unemployed” in the Texas Unemployment Act does not require severance of the employer-employee relationship. Thus, the judgment was reversed in favor of the commission.

Short-Term Rentals: Tarr v. Timberwood Park Owners Assoc., Inc., No. 16-1005, 2018 WL 2372594 (Tex. May 25, 2018). Kenneth Tarr (Tarr), owner of a house in Timberwood Park, was renting his house as a short-term rental. He rented the entire house for various amount of time between one to seven days.  He advertised on a short-term rental website and paid state and local hotel occupancy tax. The Timberwood Park Owners Association (Association) notified Tarr that he was in violation of the residential purpose covenant and the single-family-residence covenant of the deed restrictions. Because of the temporary nature of the leases, the association determined short-term rentals did not adhere to the “single family residence” restriction, and rendered the tract a commercial rental property.  The Association notified Tarr of the violations, and stated that he would remain in violation until he removed the online short-term rental advertising of his home and no longer used it for commercial purposes.  Also, Tarr would be fined $25 per day.  Tarr continued to rent his house and the Association continued to fine him.  Tarr appealed the fines to the Association’s board, but it was denied.

Tarr sued the Association in trial court seeking a declaration that the deed restrictions neither impose a minimum duration on occupancy or leasing nor permit the Association to police home-rental advertisements or impose fines. Both parties filed summary judgments. The trial court granted the Association’s summary judgment and denied Tarr’s summary judgment, concluding that Tarr operated a business on his residential lot and engaged in “multi-family” short-term rentals in violation of the unambiguous deed restriction. Tarr appealed to the court of appeals which affirmed the trial court by holding that the deed restrictions prevented Tarr from leasing the home for short periods of time to individuals who did not possess an intent to remain in the house.

The Texas Supreme Court did a de novo review of the denial of Tarr’s summary judgment.  The court, after discussing the various laws concerning interpreting restrictive covenants, found that none of these laws pertained to the current situation since the covenants at issue unambiguously failed to address the property being used as a short-term rental.  The court then looked at the Association’s argument concerning a single family, residential-use restriction on Tarr’s property.  The court found the argument combined two separate covenants, which it reviewed individually.  The first covenant concerned the single-family restriction covenant which stated that only a single-family residence could be built on the property with specific structural requirements.  The court stated that this covenant was a structural restriction only dealing with the type of structure that can be built on the property. It did not limit the activity that can permissibly take place in that structure.

Next, the court analyzed the “residential purpose” versus “business purpose” covenant. The court discussed the Association’s argument that the transient nature of short-term rentals made the use of the property a business.  The court stated that “residential purpose” concerns the way the property is used and that it should be used for living purpose as distinguished from business or commercial purposes. Since the covenants do not address the use of homes for leasing purposes, as vacation homes, short-term rentals, or minimum-occupancy durations, the court did not add these restrictions to the definition of “residential purpose.”  Instead, the court used the common definition for “residential purpose” and “business purpose” since the covenant did not have a definition for either. Using the common definitions, the court determined that so long as the people that Tarr rented his property to continued to use the property for residential purposes, no matter how long they occupied the property, neither the occupant’s on-property activities nor Tarr’s off-property activities would violate the restrictive covenant, and that Tarr’s use of the property was not a commercial use.

The Texas Supreme Court reversed and remanded the case back to the trial court.

Tort Claims Act: City of Fort Worth v. Deal, No. 02-17-00413-CV, 2018 WL 2440387 (Tex. App.—Fort Worth May 31, 2018).This is a Texas Tort Claims Act (TTCA) case where the Fort Worth Court of Appeals reversed the denial of the city’s plea to the jurisdiction and dismissed the plaintiff’s claims.

Officer Shelton observed plaintiff’s son, Lange, speeding and initiated pursuit. Officer Shelton’s in-car video camera recorded the pursuit and shows Lange dangerously speeding through residential areas and violating numerous traffic laws.  Lange did not yield or pullover. At some point at least one police officer stopped to deploy a tire-deflation device (TDD) or “Stop Stick”—a device designed to puncture a vehicle’s tires when they contact the embedded steel spikes—but Lange passed by before the officer could get into position. Less than six minutes later, Lange lost control of his vehicle and struck a tree. He was ejected from the vehicle and died. Deal sued the city, which filed a plea to the jurisdiction. The trial court denied the plea and the city appealed.

Deal claimed that the unknown police officer had deployed the TDD negligently, that the tires were damaged, and that is what caused Lange to lose control. The city asserts Deal’s negligent-deployment claim was barred by the TTCA’s intentional-tort exception. Texas has recognized common law battery claims for more than a century. Actual physical contact is not necessary to constitute a battery, so long as there is contact with clothing or an object closely identified with the body. Lange had such a close connection with his vehicle that the indirect, offensive contact between the TDD and the vehicle was sufficient to constitute contact with Lange’s person. Taking the plaintiff’s pleadings as true, the unknown police officer’s alleged negligent decisions about where, when, and how to deploy the TDD here were all subsumed in, and not distinct from, the commission of the battery. Consequently, Deal’s negligence claims arise out of the battery and are subject to the TTCA’s intentional tort exception. See Tex. Civ. Prac. & Rem. Code Ann. § 101.057(2). The plaintiff’s claims are dismissed and judgment rendered for the city.*

Subdivision Regulations: City of Fort Worth v. Alvarez, No. 02-17-00091-CV, 2018 WL 2248481 (Tex. App.—Fort Worth May 17, 2018) (mem. op.). Homeowners of the Newark Ranch Subdivision (homeowners) objected to the connection of a street in their subdivision to a subdivision development that might be partially within the extraterritorial jurisdiction (ETJ) of the City of Fort Worth. The city filed a partial plea to the jurisdiction on some of the homeowners’ claims in trial court arguing that the claims were not yet ripe because the homeowners’ lawsuit centered around the preliminary plat of the new subdivision and not the final plat.  The trial court denied the city’s plea to the jurisdiction, and accelerated an interlocutory appeal to the court of appeals.

The Fort Worth Court of Appeals reviewed the city’s ripeness issue in relation to the denial of its partial plea to the jurisdiction. The city argues that the trial court erred because the subject of the litigation is a preliminary plat, not a final plat which makes the homeowners’ claims not ripe because the claims involve surveying and validating property interests for future streets, which will occur during the final platting process. In response, the homeowners argued the city’s planning commission did not have jurisdiction over the land at issue such that the preliminary plat should be vacated or amended to exclude that land and that they had exhausted their administrative remedies at the point that the planning commission approved the preliminary plat.

Ripeness, an element of subject matter jurisdiction, pertains to a court’s power to render the particular relief requested. A case is not ripe when its resolution depends upon contingent or hypothetical facts or upon events that have not yet come to pass.  A declaratory judgment action is also subject to a ripeness review and are considered premature if governmental proceeding remain pending that will affect the parties’ respective rights.  In this case, the court of appeals looked at the city’s partial plea concerning the taking element of the homeowners’ claims based on the preliminary plat. The court sustained this portion of the city’s sole issue by stating that since the preliminary plat did not transfer any actual ownership interests from anyone to anyone else and imposed no restrictions on the homeowners, no regulatory taking had occurred. Also, declaratory relief was not ripe since the developer had not dedicated anything to the city and therefore further governmental and nongovernmental action needed to be taken by the developer before the city had interest concerning boundary lines, easements, public right-of-ways, title, abandonment or adverse possession.

Next, the court reviewed the homeowners’ request to void the planning commission’s approval of the preliminary plat, which turns on the property’s location inside or outside of the city’s ETJ. Looking at the relevant evidence submitted by the parties and looking at all the evidence favorable to the homeowners, the court found that the trial court did not err by denying this portion of the city’s plea since the city did not provide any evidence to contradict the homeowners’ allegations concerning the disputed property being outside the city’s ETJ. Therefore, the court overruled this portion of the city’s sole issue and remanded the case to the trial court for further proceedings.

Unemployment Benefits: Nkansah v. Texas Workforce Comm’n, No. 05-17-00281-CV, 2018 WL 2749765 (Tex. App.—Dallas May 31, 2018) (mem. op.). This case stems from an appeal of a trial court’s ruling denying Nkansah’s request for unemployment benefits.

When the Texas Workforce Commission (commission) denied Nkansah’s request for unemployment benefits, Nkansah appealed the decision to the trial court.  The trial court granted the Texas Workforce Commission’s and City of Dallas’ joint motion for summary judgment.  Nkansah then appealed this decision to the court of appeals, asserting that summary judgment in favor of the commission and the city was improper because substantial evidence did not support the commission’s decision that his discharge was due to misconduct related to work.

Upon a de novo review of the summary judgement evidence, the court of appeals concluded that Nkansah did not satisfy his burden to demonstrate the commission’s decision was unsupported by substantial evidence. The court of appeals determined that: (1) in reviewing the commission’s decision regarding unemployment compensation, a trial court reviews the decision by trial de novo to determine whether substantial evidence support’s the Commission’s ruling; (2) the commission’s unemployment compensation decisions are presumed valid, and the party seeking to set aside such a decision bears the burden to show that the decision was not supported by substantial evidence; and (3) a trial court may set aside a commission decision only if it concludes that the decision was made without regard to the law or the facts and therefore was unreasonable, arbitrary or capricious.

Nkansah also asserted that the trial court’s failure to rule on his motion for default judgment against the city unfairly allowed the city to file its answer. The court held that the trial court’s twelve-day delay in ruling on Nkansah’s motion was reasonable, and that the filing of the city’s answer rendered Nkansah’s complaint moot.

Nkansah also argued that the trial court erroneously failed to take action on his motion for summary judgement even though he filed his motion before the commission and city filed their joint motion for summary judgment.  The court found that the trial court did not err in declining to take action on Nkansah’s motion for summary judgement because he did not notice his motion for hearing or submission as is required by rule 166a of the rules of civil procedure.

Attorney’s Fees: Anderton v. City of Cedar Hill, No. 05-17-00138-CV, 2018 WL 2382123 (Tex. App.—Dallas May 25, 2018).  The Dallas Court of Appeals affirmed-in-part and reversed-in-part a judgment for the City of Cedar Hill in a case involving a non-conforming use in a specific zoning district.

This case went up and down the appellate ladder twice. The Andertons purchased an existing landscaping and building materials business—a commercial rather than local retail business—that operated on Lots 5 and 6, at about the time the city rezoned the area to a retail zone. The Andertons requested a zoning change to make their legal non-conforming use a legal conforming use, which the city denied. Several years later the city filed a declaratory petition and sought civil penalties against the Andertons prohibiting them from operating the existing business on the lots. The Andertons counterclaimed under Chapter 245 of the Texas Local Government Code for vested rights and inverse condemnation. Both parties moved for summary judgment. The trial court granted the city’s summary judgment motions and denied the Andertons’ motions. The Andertons appealed the first time and won a partial remand. However, afterwards, the city passed two zoning amendments making the use of the lots lawful. The city sought attorney’s fees for the claims it won in the first appeal and filed a plea to the jurisdiction on the Andertons’ remaining counterclaims. The trial court denied the plea and the attorney’s fee issue went to trial. The trial court later entered a final judgment on remand, dismissing the Andertons’ claims for non-conforming use rights in Lots 5 and 6 as moot and awarding the city its attorney’s fees. The Andertons appealed.

The court first held at the time it rendered judgment (given the zoning amendments), the trial court had no practical ability to alter the legal relationship between the parties. As a result, the Andertons’ claim as to the non-conforming use status was moot and the trial court was obliged to dismiss barring some valid exception. There are two exceptions that confer jurisdiction regardless of mootness: (1) the issue is capable of repetition, yet evading review; and (2) the collateral consequences doctrine. The record did not reflect any evidence indicating the city was likely to rezone the property back to retail only, so the first exception did not apply. The court found that theoretical possibility is not sufficient to satisfy the test.

The “collateral consequences” doctrine applies to a narrow set of circumstances – when vacating the underlying judgment will not cure the adverse consequences suffered by the party seeking to appeal that judgment.  The Andertons, however, did not argue, and the record did not reflect, any concrete disadvantages or disabilities that would persist should their claim be dismissed as moot. So, the court affirmed the trial court’s judgement as to the Andertons’ counterclaims.

As to the award of attorney’s fees, the court found that the Uniform Declaratory Judgements Act does not condition the entitlement to attorney’s fees on prevailing party status. The trial court’s findings of fact and conclusions of law affirmatively indicated that the trial court awarded the city its attorney’s fees as “equitable and just based on the claims asserted in this case, the objectives sought by the parties and the outcome of this case” and not as a “prevailing party.” However, not withstanding, the extent of a plaintiff’s success is a crucial factor in determining the proper amount of an award of attorney’s fees. As in cases involving only a modicum of success in the context of the prevailing party statute, even fees supported by uncontradicted testimony may be “unreasonable” in light of the amount involved, the results obtained, and in the absence of evidence that such fees were warranted due to circumstances unique to the case. After going through the win/loss points and going through each lot in the case, the appellate court held the trial court abused its discretion in awarding attorney’s fees.*

Civil Procedure: Sims v. City of Madisonville, No. 08-15-00113-CV, 2018 WL 2752714 (Tex. App.—El Paso June 8, 2018). In this case, the El Paso Court of Appeals dismisses a Texas Whistleblower Act (Act) for lack of jurisdiction.

Sims sued the City of Madisonville alleging a violation of the Act. The city filed a plea to the jurisdiction asserting that Sims did not timely file his notice of appeal.

A trial court retains plenary power over a final judgment for at least 30 days after signing that judgment. This period is extended if a party timely files a motion seeking a substantive change in the judgment (e.g., a motion for a new trial). Sims filed no such motion.

An exception exists under Rule 306a(4) when a party doesn’t receive notice or have actual knowledge of the signed judgment within 20 days after it is signed. To establish the exception, the party must comply with Rule 306a(5) and prove: (1) the date the party received notice or had actual knowledge; and (2) that the date was more than 20 but less than 91 days after the judgment was signed. The Texas Supreme Court has held that a Rule 306a(5) motion may be filed at any time within the trial court’s plenary power “measured from the date determined under Rule 306a(4).”

Sims filed his Rule 306a(5) motion within the required period, but did not secure a hearing or ruling until March 12, 2015, one day late (one day after the trial court’s plenary power had expired). Thus, the trial court’s order on his Rule306a(5) motion was void. In the absence of a valid Rule 306a(5) order, Sims notice of appeal was due on December 31, 2014. Sims didn’t file his notice of appeal until March 12, 2015, so the case is dismissed for lack of jurisdiction.

Economic Development: City of Magnolia v. Smedley, No. 09-15-00334-CV, 2018 WL 2246533 (Tex. App.—Beaumont May 17, 2018) (mem. op.). This matter was remanded by the Texas Supreme Court, which reversed part of the Beaumont Court of Appeal’s previous judgment. The Beaumont Court of Appeals confined its discussion in this case to the arguments raised by the Magnolia 4A and 4B Economic Development Corporations (EDCs) because its ruling as to the city was not reversed or remanded.

Smedley sued the city, the EDCs, and other entities alleging that the defendants caused Smedley’s property to flood and retain standing water, causing damages. The EDCs argue the trial court erred in refusing to grant their summary judgment.

In the motion for summary judgment, the EDCs argue that they are not proper defendants for Smedley’s claims under Section 11.086 of the Water Code or his takings claims. The Beaumont Court of Appeals agreed with the EDCs, holding that: (1) Smedley lacked standing to bring a claim under Section 11.086 of the Water Code because the EDCs do not own or control any of the relevant property; and (2) because the EDCs lack the power of eminent domain, as a matter of law, the EDCs cannot be subject to a suit under Article I, Section 17(a) of the Texas Constitution (a takings claim).

The Beaumont Court of Appeals would have reversed and rendered judgment for the EDCs but for some additional language in the trial court’s order providing that Smedley may amend his petition to add claims “for prospective relief (declaratory or injunctive relief to require compliance with statutory or constitutional provisions) against appropriate persons in their official capacity.” Neither the city nor the EDCs complained about this language on appeal. Thus, the case is reversed to the extent the trial court denied the EDC’s motion for summary judgment regarding the Water Code and takings claims, and is remanded solely with respect to the additional language in the trial court’s order giving Smedley the opportunity to amend his petition.

Zoning: Vogler v. City of Lamesa, No. 11-16-00168-CV, 2018 WL 2348498 (Tex. App.—Eastland May 24, 2018) (mem. op.). The Eastland Court of Appeals affirmed the City of Lamesa Board of Adjustment’s grant of a setback variance for a carport.

Vara sought and received a setback variance from the City of Lamesa Board of Adjustment (BOA) in order to build a carport in order to protect her antique cars. A neighbor (Vogler) opposed the variance. Vogler sued under Chapter 211 of the Texas Local Government Code to undo the variance. The trial court affirmed the BOA’s grant of the variance and Vogler appealed.

The trial court sits only as a court of review, and it may consider only the legality of the BOA’s decision. Vogler bears the burden to establish that the BOA’s action was illegal, and she must do so by a very clear showing that the BOA abused its discretion by acting arbitrarily and unreasonably or without reference to any guiding rules or principles. Vogler first asserts the variance amounted to a rezoning; however, the BOA granted an area variance, not a use variance. Next, the record reveals that the location of Vara’s property makes it a prime target for “destruction or damage by the local . . . students . . . who might lob rocks and bottles and cans and whatnot at them.” Such a condition appears to be unique to Vara’s property. That Vara owns antique cars does not make the unique condition of the property a self-imposed hardship. As a result, the BOA was within its powers and discretion to grant the variance and Vogler failed to meet her burden.*

Tort Claims Act: City of Edinburg v. GNJ Realty Invs. LLC, No. 13-17-00290-CV, 2018 WL 2731907 (Tex. App.—Corpus Christi June 7, 2018) (mem. op.). This is an interlocutory appeal in a Texas Tort Claims Act/sewage backup case involving alleged negligent operation of a motor-driven lift pump. The Thirteenth Court of Appeals reversed and rendered an opinion in favor of the city.

GNJ Realty Investments, LLC (GNJ) brought a negligence claim against the City of Edinburg for sewage backup and property damage allegedly caused by a city-owned faulty motor-driven lift pump. GNJ leased a building to RGV Footcare. On February 2, 2014, a RGV Footcare employee saw standing water in almost every room of the building’s floors. She called a plumber soon after and called the city the next day. GNJ asserted negligence because it felt the city failed to use reasonable care in the service and maintenance of the motor-driven equipment used in the sanitation system. It asserted the flooding was system backup and arose from this failure. The wastewater supervisor for the city testified that upon personal inspection, the manhole that gave sewer service to GNJ’s building showed no evidence that anything the city owned caused this incident. He further testified that if a lift pump was faulty, certain alarms and logs would have been generated by the system. No such alarms or logs were created on that day, although a short was logged as occurring the following day.  The city filed a plea to the jurisdiction which the trial court denied. The city appealed.

The court of appeals held no evidence in the record indicated the pump was faulty and was directly linked to the flooding of GNJ’s building. As stated by the Texas Supreme Court many times “arises from” must have a nexus between the operation and/or maintenance of the equipment and the damage sustained. The connection must be considerably more than just the involvement of property. The trial court was not presented with any evidence that any of the pumps at the relevant lift station were clogged—fully or partially—on February 3, 2014. Moreover, that a pump “shorted out” the day after RGV Footcare experienced the water back up is alone not evidence that it was malfunctioning the day before. Given the record, the court reversed the trial court’s order and rendered judgment for the city. GNJ’s claim was dismissed.* 

Annexation: City of Brownsville v. City of Port Isabel, No. 13-16-00498-CV, 2018 WL 2372510 (Tex. App.—Corpus Christi May 24, 2018) (mem. op.). The question in this case is whether the City of Port Isabel and the City of Laguna Vista (cities) have standing to challenge annexations by the City of Brownsville, and if so, on what grounds. The City of Brownsville passed several ordinances annexing territory within its two-mile extraterritorial jurisdiction. The cities claimed that the ordinances were invalid because the City of Brownsville’s city council failed to comply with certain statutory procedures related to notice and hearing requirements. The cities also argued, from a substantive standpoint, that the property descriptions of the annexed areas do not close and illegally encroach upon the cities’ respective extraterritorial jurisdictions (ETJs). The City of Brownsville filed a motion for summary judgment arguing that the cities lacked standing to challenge the procedure and substance of the ordinances because the annexations did not burden the cities and the cities stood to gain nothing if the ordinances were to be invalidated. The trial court denied the motion, and City of Brownsville appealed.

On appeal, the City of Brownsville argued that the trial court erred in denying its motion for summary judgment because the cities lack standing to challenge both the procedure and substance of the annexation ordinances. The court held that—as a matter of law—the cities lacked standing to procedurally challenge the annexations because of existing case law stating that only the state can challenge annexations for procedural irregularities through a quo warranto suit. See Alexander Oil Co. v. City of Seguin, 825 S.W.2d 434, 439 (Tex. 1991). The trial court erred when it found otherwise.

On substance, however, the court upheld the trial court’s denial of the City of Brownsville’s motion for summary judgment. In response to the motion for summary judgment, a land surveyor testified that specific annexations did contain property descriptions that did not close. Consequently, the court held that there is at least a fact issue regarding whether the open-ended nature of the annexations burden the cities by encroaching upon their respective ETJs. The court affirmed the trial court’s judgment with respect to the cities’ substance-based challenges.

Zoning: Murphy v. City of Galveston, No. 14-17-00063-CV, 2018 WL 2701983 (Tex. App.—Houston [14th Dist.] June 5, 2018).Following Hurricane Ike, the City of Galveston informed Joe Murphy and Yoram Ben-Amram (property owners) that, because their multi-family dwellings had been unoccupied for over six months, their properties had lost their non-conforming status. Pursuant to Section 29-11(a)(4) of the city zoning ordinance, the property owners had three options: (1) appeal the revocation decision to the board of adjustment; (2) submit an application for a specific use permit; or (3) both. Property owners submitted a SUP application to the city, and city staff recommended approval. The city council ultimately denied the SUP request. The property owners sued the city, arguing that the city unconstitutionally took their property without just compensation through inverse condemnation. The city filed a plea to the jurisdiction, arguing that the property owners failed to exhaust their administrative remedies by refusing to take an administrative appeal to the board of adjustment. The trial court granted the city’s plea, and the property owners appealed.

The exhaustion rule requires that plaintiffs pursue all available remedies within the administrative process before seeking judicial relief. With regard to zoning matters, “administrative remedies available under section 211 of the Local Government Code generally must be exhausted before a party may seek judicial review of a determination made by an administrative official.” Lazarides v. Farris, 367 S.W.3d 788, 798 (Tex. App.—Houston [14th Dist.] 2012, no pet.). In this case, the property owners argued that a fact issue involving the doctrines of estoppel and business compulsion precluded the application of the exhaustion rule. The court disagreed with the property owners.

On the estoppel issue, the property owners argued that the city’s failure to inform them that they had the right to appeal the revocation of the property’s non-conforming status to the board of adjustment estopped the city from enforcing its zoning ordinance. However, the property owners did not cite any authority that requires city officials to inform property owners about applicable zoning standards or how to appeal decisions under those standards. Further, the court recognized its prior holding that those residing in or having business dealings with a city are presumed to know its ordinances. Further, the property owners failed to provide evidence that estoppel was the only available remedy or that the city received any direct benefit in connection with its decision to revoke the property’s non-conforming status.

On the business compulsion argument, the property owners claimed that the city’s actions in concealing their right to appeal the revocation decision to the board of adjustment while at the same time coercing the owners to make costly repairs amounted to business compulsion. The court quickly dismissed the property owners’ business compulsion argument on the grounds that the property owners failed to preserve the argument because they did not raise business compulsion in their initial response. The court held that trial court did not err in granting the city’s plea to the 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.

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