Recent Texas Cases of Interest to Cities

Note: Included cases are from May 11, 2023, through June 10, 2023.

Eminent Domain: Hidalgo Cnty. Water Improvement Dist. No. 3 v. Hidalgo Cnty. Irrigation Dist. No. 1, No. 21-0507, 2023 WL 3556685 (Tex. May 19, 2023).  The issue in this case is whether in an eminent-domain proceeding brought by one political subdivision against another, governmental immunity bars such proceeding.

Hidalgo County Water Improvement District No. 3 (Improvement District) offered to purchase a subsurface easement from the Hidalgo County Irrigation District No. 1 (Irrigation District), which rejected the offer.  After negotiations failed, the Improvement District filed a condemnation action against the Irrigation District.  The Irrigation District filed a plea to the jurisdiction arguing that it had governmental immunity from the condemnation suit and the Legislature had not waived that immunity.  The trial court granted the plea and dismissed the suit. The court of appeals affirmed.

The Supreme reversed, holding that governmental immunity does not apply in eminent-domain proceedings and that the Irrigation District is not immune from the Improvement District’s condemnation suit. In reaching this conclusion, the court took into consideration the purposes governmental immunity serves, its nature, and the development of the court’s immunity and eminent-domain precedent.

Immunity: City of Austin v. Quinlan, No. 22-0202, 2023 WL 3767092 (Tex. June 2, 2023). The issue in this appeal is whether the City of Austin had a legal duty to ensure a sidewalk café, to which it had delegated maintenance responsibilities under a permit, fulfilled its maintenance obligations, thus, waiving its governmental immunity.

A restaurant patron brought premises liability action against the City of Austin and a restaurant that operated a sidewalk café following an ankle injury that was sustained when the patron fell more than one foot from the sidewalk to the street.  The trial court denied the city’s plea to the jurisdiction and the city appealed. The court of appeals affirmed in part and reserved in part. 

The Supreme Court granted the petition for review and reversed, holding that: (1) a sidewalk café maintenance agreement between the restaurant and the city did not impose a nondiscretionary duty on the city, and thus, claims against the city did not fall outside the “discretionary function” exception to waiver of immunity under the Texas Tort Claims Act; (2) the city’s alleged control over the sidewalk café, under agreement, had no bearing on the issue of whether the “discretionary function” exception to the city’s waiver of immunity applied; (3) the statutes governing a city’s authority to issue a permit for use of city street or sidewalk for public convenience or private use did not impose a nondelegable, nondiscretionary duty on a city, for which alleged breach fell outside the “discretionary function” exception to waiver of immunity; and (4) the dismissal of the complaint, rather than remand to allow the patron an opportunity to replead, was appropriate.

Economic Development Agreements: City of League City v. Jimmy Changas, Inc., No. 21-0307, 2023 WL 3909986 (Tex. June 9, 2023).  This is an interlocutory appeal in which the Supreme Court determined the proper governmental/proprietary dichotomy in a breach-of-contract case.

The City of League City entered into a “Chapter 380 Economic Development Incentives Grant Agreement” with Jimmy Changas, Inc. (Changas) in which the city offered incentives including reimbursements of fees and a percentage of local sales tax payments to Changas to invest $5 million to develop a restaurant facility within the city’s entertainment district. After Changas completed the project, the city failed to provide the reimbursements contending that Changas failed to timely submit documentation that it had invested $5 million and created at least 80 full-time jobs. Changas sued the city asserting breach of contract. The court of appeals reversed the trial court’s holding, finding that the city engaged in a proprietary function when it entered the contract, and thus, was not immune from suit.

On appeal, the Supreme Court affirmed the appellate court’s holding finding that under the Wasson II factors, the city was engaging in a proprietary activity. The court determined that: (1) the city’s act of entering into the contract was discretionary; (2) the contract primarily benefited the city residents and not the general public; (3) the city was acting on its own behalf and not on the State’s behalf when it entered the contract; and (4) the city’s decision to enter into the contract was not related to any governmental function. 

Tort Claims Act: Alief Indep. Sch. Dist. v. Velazquez, No. 01-22-00444-CV, 2023 WL 3555495 (Tex. App.—Houston [1st Dist.] May 18, 2023) (mem. op.). Velazquez sued the Alief Independent School District after he was struck by a vehicle driven by a school cafeteria worker who was on her way to the district office to inquire about her health benefits. The district filed a plea to the jurisdiction, claiming governmental immunity. The trial court denied the plea, and the district appealed.

The appellate court reversed and rendered, holding that the cafeteria worker was not acting within the scope of her employment by driving to ask about her benefits after her shift ended, and therefore the district’s governmental immunity was not waived under the TTCA.

Takings: City of Lake Jackson v. Adaway, No. 01-22-00033-CV, 2023 WL 3588383 (Tex. App.—Houston [1st Dist.] May 23, 2023) (mem. op.). Property owners sued the City of Lake Jackson, asserting that the city took certain flood mitigation actions that caused their properties to flood. The owners brought claims for constitutional takings, nuisance, trespass, negligence, and a statutory taking under Chapter 2007, Gov’t Code. The city claimed that because the owners had not shown causation, they had failed to allege a claim for which governmental immunity had been waived. The trial court denied the city’s plea to the jurisdiction and the city appealed.

The appellate court affirmed in part, reversed and rendered in part, and reversed and remanded in part. As to the constitutional takings claim, the court held that the owners sufficiently pleaded that the city acted with the intent necessary to state a takings claim, the owners produced evidence to raise a fact question on the element of proximate cause, and the public-necessity exception to the waiver was an affirmative defense rather than a jurisdictional defect. As to the nuisance and trespass claims, the court held that because the owners had stated a viable takings claim, they had stated viable trespass and nuisance claims. As to the claims of negligence, the court held that the waiver of immunity in the Texas Tort Claims Act did not apply because there was no fact question with regard to whether the motor-driven equipment had caused the flooding. As to the statutory takings claim, the court held that Chapter 2007 did not apply to an action by a city.

Employment: City of Houston v. Carter, No. 01-22-00453-CV, 2023 WL 3632788 (Tex. App.—Houston [1st Dist.] May 25, 2023) (mem. op.).  Carter sued the City of Houston when she was sexually harassed at work and then experienced retaliation after being transferred to another location during the sexual harassment investigation. The city filed a combined plea to the jurisdiction and motion for summary judgment, claiming governmental immunity. The trial court denied the city’s plea and the city appealed.

The appellate court reversed, holding that: (1) although Carter had exhausted her administrative remedies, she had not established a causal link between her transfer, which was the adverse employment action, and the retaliation she experienced; and (2) Carter had not established a prima facie case of sexual harassment because the conduct was not physically threatening or humiliating and did not unreasonably interfere with her work performance.

Tort Claims Act: Hall v. City of Jersey Vill., No. 01-22-00452-CV, 2023 WL 3873351 (Tex. App.—Houston [1st Dist.] June 8, 2023) (mem. op.). Hall sued the City of Jersey Village when a golf ball struck her forehead while she was working at a restaurant at a city-owned golf course. The trial court granted the city’s plea to the jurisdiction claiming governmental immunity and Hall appealed.

The appellate court reversed, holding that: (1) as to the premises liability claim, the city had provided no jurisdictional evidence negating the waiver of immunity, so the issue was pleading sufficiency and Hall should have been given an opportunity to amend her pleading; and (2) a fact issue existed with regard to whether the person who hit the golf ball that struck Hall did so in his capacity as a city employee.

Tort Claims Act: City of Arlington v. Taylor, No. 02-22-00325-CV, 2023 WL 3521891 (Tex. App.—Fort Worth May 18, 2023). This is a Texas Tort Claims Act emergency exception case stemming from a motor-vehicle accident.

Taylor sued the City of Arlington after he was involved in a car accident at a four-way intersection with Baskin, a city police officer, who was responding to an emergency call to assist another officer with an occupied stolen vehicle. The city filed a plea to the jurisdiction, which the trial court denied. The city appealed asserting that it was entitled to immunity under the emergency exception to the Texas Tort Claims Act waiver of immunity.

For an emergency exception to apply, the city has the burden of conclusively showing that Basking (1) was responding to an emergency call or reacting to an emergency situation and (2) complied with the laws applicable to emergency action, if any such law exists. The court of appeals affirmed, finding that the city did not conclusively prove that Baskin proceeded into the intersection and past the red light after slowing as necessary for safe operation.

Contracts: Tex. Disposal Sys., Inc. v. City of Round Rock, No. 03-22-00450-CV, 2023 WL 3727963 (Tex. App.—Austin May 31, 2023). In November 2021, the city council of the City of Round Rock approved a resolution authorizing the city manager to give Texas Disposal System (TDS) notice that the city would be terminating its franchise agreement for non-residential garbage and recycling collection services effective April 30, 2022, as well as a resolution approving the mayor to execute an agreement with another vendor to be city’s single service provider. In accordance with the contract terms, the city provided the 30-day notice of the contract termination in March 2022.

Upon receiving the notice, TDS sued the city and the city manager seeking declaratory and injunctive relief. After the trial court denied the first request, TDS filed an amended petition which included an ultra vires claim against the city manager. After a hearing on the second request for a temporary restraining order the trial court denied TDS’s request finding that it had not proven the required elements under the Uniform Declaratory Judgment Act (UDJA). TDS subsequently filed an interlocutory appeal raising two issues. The first issue involved the city’s charter provision prohibiting exclusive franchises for public utilities. TDS claimed the city violated its charter by granting an exclusive franchise agreement to the other vendor, which would cause TDS irreparable harm without relief. TDS also claimed the city violated the Texas Open Meetings Act (TOMA) at a July 2021 retreat in which the council first considered possible action regarding commercial garbage collection because the agenda notice was not “sufficiently specific” to give the public notice that it was considering an exclusive franchise agreement. The city responded by challenging the court’s subject matter jurisdiction for the claims under the UDJA.

Although the court of appeals determined the trial court had subject matter jurisdiction, it affirmed the trial court’s order.  The court reasoned that at the time of the hearing on the temporary restraining order, the city had provided the required termination notice under the terms of their contract, and the contract between TDS and the city was no longer in effect. Therefore, TDS failed to establish “probable, imminent, and irreparable injury in the interim that its requested injunctive relief would have prevented.”

Takings/Ultra Vires: Consol. Towne E. Holdings, LLC v. City of Laredo, No. 04-22-00130-CV, 2023 WL 3606328 (Tex. App.—San Antonio May 24, 2023). Consolidated Towne East Holdings, LLC (“Consolidated”) sued the city to develop land in the city’s extraterritorial jurisdiction. Consolidated sought water and sewer services from the city as part of its proposed development. The city required annexation before it would provide the services. Consolidated sued on the grounds that the city’s precondition for water and sewer services amounts to an unconstitutional taking and that denial of services is an ultra vires act by the city manager and the city’s director of utilities. The trial court granted the city’s summary judgment motion and dismissed Consolidated’s claims. Consolidated appealed.

The appellate court affirmed, finding: (1) the case was not ripe because whether annexation costs are roughly proportional to their asserted purposes is not ripe for resolution until those costs are authoritatively set; (2) Consolidated’s declaratory judgment claim on the city ordinance requiring annexation likewise failed because it was premature; and (3) Consolidated’s ultra vires claim failed because the city manager and director of utilities had authority in the city’s ordinances to deny providing water and sewer services to Consolidated.

Takings/Tort Claims Act: Rivera v. San Antonio Water Sys., No. 04-22-00309-CV, 2023 WL 3609233 (Tex. App.—San Antonio May 24, 2023) (mem. op.). This case has some complicated facts surrounding the plaintiffs’ claims. Ultimately, some individuals sued the San Antonio Water System (SAWS) because of damage to a park when SAWS’s contractor was performing sewer work at the park, claiming: (1) inverse condemnation; (2) waiver pursuant to the Texas Tort Claims Act (the “TTCA”); and (3) waiver under the Texas Uniform Declaratory Judgments Act (the “UDJA”). The trial court granted SAWS’s plea to the jurisdiction and the plaintiffs appealed.

The appellate court affirmed, finding: (1) the plaintiffs did not provide SAWS notice of the claim required by the TTCA; (2) because the damages alleged by plaintiffs are at best the accidental or negligent result of SAWS’s purported failure to supervise, mitigate, or mediate the contractor’s work, there is no public benefit, and the properties cannot be said to be taken or damaged for public use; and (3) the individual who conveyed the park to the city does not have a declaratory judgment claim because the deed is not an ordinance or statute that provides a limited waiver of immunity.

Tort Claims Act: City of Mesquite v. Wagner, No. 05-22-00826-CV, 2023 WL 3408528 (Tex. App.—Dallas May 12, 2023).  After being bitten by an officer’s police service dog, Anthony Wagner sued the City of Mesquite asserting a negligence claim under the Texas Tort Claims Act (TTCA). The city denied the allegations of negligence and filed a plea to the jurisdiction raising, among other defenses, governmental immunity. The trial court subsequently denied the city’s plea, and the city filed an interlocutory appeal. The city claimed that: (1) the officer was entitled to official immunity which extended to the city; (2) Wagner’s injury had not been caused by the use of tangible personal property, as required to invoke a waiver of governmental immunity; (3) the claim did not arise out of negligent acts; and (4) because the officer was responding to an emergency call, the emergency-response exception to the governmental immunity waiver applied.

Affirming the trial court’s order, the court of appeals first concluded that the city did not meet its burden to establish that the officer acted in good faith for purposes of official immunity. While the city presented an affidavit explaining the circumstances of the event, the evidence did not show that a reasonably prudent officer faced with the same circumstances could have believed the officer’s conduct was justified. The court further held the officer was in possession of the police dog and using him to track burglary suspects when the police dog bit and caused Wagner’s injuries; therefore, Wagner’s injuries were caused by the officer’s use of tangible personal property. To the city’s argument that the officer’s actions were intentional rather than negligent when using the police dog and excepted from the TTCA’s waiver of immunity, the court determined that statements made in the officer’s affidavit and his statements in an earlier incident memo raised fact issues about whether the officer was negligent. Lastly, the court concluded that even if the emergency-response exception applied to a situation involving an officer who is responding to a call for assistance, the evidence raised material fact issues as to whether the officer acted with conscious indifference or reckless disregard for Wagner’s safety.

Tort Claims Act: Martin v. Vill. of Surfside Beach, No. 14-22-00085-CV, 2023 WL 3476939, (Tex. App.—Houston [14th Dist.] May 16, 2023). On June 28, 2019, Martin was involved in a car accident with Pedro Gutierrez, an employee of the Village of Surfside Beach who was driving a village-owned truck. Martin sued Gutierrez and the village for negligence, claiming that Gutierrez failed to yield the right-of-way. The village argued that it had governmental immunity under the Texas Tort Claims Act because Gutierrez was not acting within the scope of his employment at the time of the accident. The trial court granted the village’s plea to the jurisdiction and dismissed Martin’s claims, leading to Martin’s appeal.

Governmental immunity protects political subdivisions from lawsuits unless immunity has been waived by the legislature. The Texas Tort Claims Act (TTCA) provides a waiver of immunity for cases involving the use of a motor vehicle by an employee within the course and scope of their employment. A presumption exists that a driver is acting within the course and scope of their employment when a collision occurs in an employer-owned vehicle. However, this presumption can be rebutted with evidence of personal errands or actions not in furtherance of the employer’s business. Additionally, the “coming-and-going rule” states that employees generally do not act within the course and scope of their employment when traveling to and from work. The village presented a declaration from Gutierrez stating that he was driving home after stopping to do some personal shopping when the collision occurred, which rebutted the presumption that Gutierrez was acting in the course and scope of his employment. Furthermore, the fact that Gutierrez was on call or wearing a village-branded shirt did not establish a connection to the employer’s business at the time of the accident. The court held that the evidence demonstrated that Gutierrez was not acting within the course and scope of his employment, thereby concluding that the village’s governmental immunity had not been waived. As a result, the trial court lacked jurisdiction over the plaintiff’s suit, and the granting of the village’s plea to the jurisdiction was not erroneous.

Civil Service: City of Houston v. Dunbar, No. 14-21-00570-CV, 2023 WL 3596260 (Tex. App.—Houston [14th Dist.] May 23, 2023). During a public event on September 11, 2019, at HFD Fire Station 84 featuring Houston Rockets basketball players, district chief Dunbar was present when unauthorized personnel drove the station’s high-water emergency vehicle, using its lights and sirens. Assistant fire chief Griffin later filed a complaint of misconduct against Dunbar, resulting in a three-day unpaid suspension following an internal investigation. Dunbar appealed the suspension to the civil service commission, which upheld the suspension, and then to the district court, which ruled in his favor.

The city appealed the district court’s decision, arguing that the district court’s judgment is erroneous because (1) substantial evidence supported the commission’s order to suspend Dunbar, and (2) the commission’s order was free from any illegality. In its analysis, the appellate court emphasized the substantial evidence standard, in which the trial court may not substitute its judgment for that of the agency on controverted issues of fact but must affirm administrative findings in contested cases if there is more than a scintilla of evidence to support them. The appellate court determined that there is more than a scintilla of evidence to support the commission’s order upholding Dunbar’s suspension, siding with the city. A public employer’s action can be tainted by illegality if the employer’s action is arbitrary or capricious, or a clear abuse of authority. Dunbar’s arguments that the commission’s decision was tainted by illegality stemmed from alleged notice issues. The court was not persuaded by these arguments, reversed the district court’s judgment, and affirmed the commission’s order.