Recent Texas Cases of Interest to Cities

Note:  Included cases are from February 11, 2017 through March 10, 2017.

Tort Claims: City of San Antonio v. Cervantes, No. 04-16-00569-CV, 2017 WL 685718 (Tex. App.—San Antonio Feb. 22, 2017). This is a Texas Tort Claims Act (Act) case in which the San Antonio Court of Appeals reversed the trial court’s order denying the city’s plea to the jurisdiction because the city lacked proper notice of the claim.

In 2015, Charles Cervantes filed suit against the city seeking damages for personal injuries alleged to be caused by a 2013 automobile accident with a City of San Antonio police officer. Cervantes’ petition asserted the city had both formal and actual notice of the claim as required by Section 101.101 of the Texas Tort Claims Act. The city filed a plea to the jurisdiction, arguing that governmental immunity was not waived because Cervantes failed to give notice within the required six months from the date of the incident. The trial court denied the plea and the city filed an interlocutory appeal. As a preliminary matter, the court determined that without further evidence of actual consent between the parties, the city did not waive its right to appeal by signing the trial court’s order.

As a condition of the waiver of immunity from suit, the Texas Tort Claims Act requires that a governmental unit obtain notice of a claim within six months of the incident giving rise to it.  That requirement is satisfied if the governmental unit receives formal notice that reasonably describes the damage or injury, the time and place of the incident, and the incident itself. Citing an affidavit from a risk management officer in the city’s finance department, the court concluded that the city did not receive formal notice of the claim. The Texas Tort Claims Act can also be satisfied if the governmental unit has actual notice of the injury, but it is not enough that the governmental unit should have known about the injury or should have investigated further. Here, the police reports after the accident showed that there were no injuries reported at the time. In conversations both at the scene and afterwards, Cervantes indicated that he was “shaken up” and “kind of numb,” but that he believed he was “all right.” The court held that there was no evidence to support a finding that the city had actual notice of an injury. Because Cervantes was claiming personal injury and not property damage, the court also rejected his argument that the city’s notice of the property damage from the accident met the Act’s notice requirement. Finally, Cervantes argued that the statute gives rise to an absurd result for claimants whose injuries manifest long after the incident. The court declined to address the argument because there was no evidence that Cervantes was such a claimant. The court reversed the trial court’s order denying the plea.

Takings: Meuth v. City of Seguin, No. 04-16-00183-CV, 2017 WL 603646 (Tex. App.—San Antonio Feb. 15, 2017) (mem. op.). This is a takings case in which the San Antonio Court of Appeals affirmed the trial court’s order granting a plea to the jurisdiction by the City of Seguin.

Prior to the City of Seguin annexing the property in question, a storm water drainage culvert pipe was constructed underneath it. After the city annexed the property in 1965, the owner constructed a house on the land over the drainage pipe. The current property owner, Tracy Meuth, brought several claims focusing on the city’s annexation of the property and use of the pipe without a drainage easement, the city’s permitting of a home to be built over the property, and the city’s failure to take action to repair the corroding pipe and associated soil instability underneath the house.

Meuth first alleged that the city’s actions and inactions amounted to a taking of her property. A takings claim requires (1) an intentional governmental act; (2) that results in property being taken; (3) for public use. First, the court determined that neither annexation nor permitting of the house’s construction resulted in her property being taken for public use, leaving the issue of the drainage pipe. The court noted similarities with AN Collision Ctr. of Addison, Inc. v. Town of Addison, 310 S.W.3d 191 (Tex. App.—Dallas 2010, no pet.), where the City of Addison purchased a previously constructed airport that drained rainwater onto AN Collision’s property. The Dallas court, noting that the drainage was caused by the prior construction of the airport, and not by any act of the city, concluded that a failure to take corrective measures does not rise to the level of a taking. The court also compared Meuth’s case to Harris Cty. Flood Control Dist. v. Kerr, 499 S.W.3d 793, 799 (Tex. 2016), where the Texas Supreme Court held that governments “cannot be expected to insure against every misfortune occurring within their geographical boundaries, on the theory that they could have done more. No government could afford such obligations.” Id. at 804. Here, Meuth’s taking claim focused on city’s failure to take corrective measures to the water elsewhere and repair the corroding pipe. Because Meuth’s claim was based on the city’s failure to take action, the court held that the city’s actions were not intentional and that the trial court properly granted the city’s plea to the jurisdiction.

Meuth next alleged that the trial court erred in granting the city’s plea to the jurisdiction on her declaratory judgment claim. The Texas Supreme Court has explained that “private parties cannot circumvent the State’s sovereign immunity from suit by characterizing a suit for money damages, such as a contract dispute, as a declaratory-judgment claim.” City of Houston v. Williams, 216 S.W.3d 827, 828-29 (Tex. 2007) (quoting Texas Nat. Res. Conservation Comm’n v. IT–Davy, 74 S.W.3d 849, 856 (Tex. 2002)). Here, the San Antonio court concluded that because Meuth’s declaratory judgment sought to hold the city “liable” for costs of repair, it was also barred by the city’s sovereign immunity.

For Meuth’s remaining claims, including intentional and negligent misrepresentation, gross negligence, and fraud, Meuth contended the trial court erred in granting the city’s plea to the jurisdiction because the city was engaged in a propriety function for which immunity was waived. The court, quoting the Dallas Court of Appeals, concluded that refusal to repair the pipe is a governmental function and that Meuth “cannot avoid the effect of governmental immunity by creative pleading.” Bell v. City of Dallas, 146 S.W.3d 819, 821 (Tex. App.—Dallas 2004 no pet.).

Finally, Meuth argued in the alternative that the city should be stopped from asserting immunity based on promises it allegedly made to Meuth before she purchased the property. “The general rule has been in this state that when a unit of government is exercising its governmental powers, it is not subject to estoppel.” City of Hutchins v. Prasifka, 450 S.W.2d 829, 835 (Tex. 1970). There is a narrow and rarely-applied exception, however, for cases where justice requires the doctrine’s application and where there is no interference with governmental functions. Id. at 836. The court held that the facts of the case did not present an exceptional case for estopping the city because: (1) the property owners, not the city, chose to build the house; (2) The Texas Supreme Court has held that a city is not estopped from asserting immunity even if a plaintiff acts in reliance of the city’s representations; (3) the city received no benefit for its promises; and (4) unlike the only two occasions when the Texas Supreme Court has applied estoppel, the City of Seguin’s misrepresentations did not extinguish Meuth’s right to pursue her claim. The San Antonio court affirmed the trial court’s order.

Referendum: City of Plano v. Carruth, No. 05-16-00573-CV, 2017 WL 711656 (Tex. App.—Dallas Feb. 23, 2017) (mem. op.). This is a referendum case where the Dallas Court of Appeals dismissed all but one of the plaintiffs’ claims under a plea to the jurisdiction.  It held the trial court had jurisdiction to consider the merits of the remaining mandamus/ultra-vires claim against the city secretary.

The city adopted a comprehensive plan and zoning ordinance. The city charter permits qualified voters to submit a referendum petition seeking reconsideration of and a public vote on any ordinance. Citizens submitted a referendum petition to change the ordinance adopting a change in the comprehensive plan to the city secretary. The city secretary did not act on the referendum petition.  The city took the position that zoning and comprehensive plans have been removed from the referendum scope by state law. So no action is required.  The citizens filed a writ of mandamus seeking a court order directing the city secretary to present the petition to the city council, and directing the city council to reconsider the comprehensive plan and submit it to popular vote if the council did not entirely repeal it. In addition, they sought a declaratory judgment that pending approval by the voters in a referendum the comprehensive plan is suspended. The city filed a plea to the jurisdiction which the trial court denied. The city appealed.

The court of appeals first held the plaintiffs properly plead jurisdiction against the city secretary. The court held there is a difference between the merits of whether mandamus should be issued with whether the trial court has jurisdiction to hear those merits. “Whether the trial court should ultimately grant or deny the petition for mandamus is not the issue before [the court].”  Based on the language in the pleadings, the trial court has jurisdiction to hear the merits of the mandamus claim. However, no mandamus can be issued against the remaining officials since the city secretary has not submitted the petition to the council. Their duty is not triggered unless and until the petition is submitted; therefore, the claims are not ripe. Finally, the court dismissed the declaratory judgment claims noting the charter does not provide that an ordinance is suspended immediately upon the filing of a referendum petition.  The charter is clear that a suspension applies only upon the subject being submitted to popular vote. Until the council is presented with the petition and acts on it, any declaration about the effect of that action would be advisory. The trial court’s order was affirmed in part and reversed in part.*

Workers’ Compensation: City of Dallas v. Ellis, No. 05-16-00348-CV, 2017 WL 655927 (Tex. App.—Dallas Feb. 17, 2017) (mem. op.). This is a workers’ compensation/statute of limitations/subrogation case in which the Dallas Court of Appeals reversed the trial court’s order and rendered judgment granting the city’s motion, thus reviving the dormant judgment.

In 1987, a City of Dallas employee was injured in an automobile accident during the course and scope of his employment. The city paid the workers’ compensation benefits while Ellis, an attorney, represented the employee in his suit against the third-party tort feasors. The suit settled, and the settlement agreement provided for Ellis to resolve the city’s workers’ compensation lien. The city, however, was not paid and sued Ellis for conversion of the lien and obtained a judgment awarding the city about $87,000. A modified final judgment later reduced the total award to about $75,000.

In 2012, the city filed a motion to revive the judgment by scire facias. However, the motion mistakenly sought to revive the earlier judgment rather than the modified judgment. After a writ of execution issued two and a half years later, the city realized it had revived the wrong judgment. In 2015, the city filed its first amended motion to revive the modified judgment, acknowledging that a judgment becomes dormant after ten years of rendition and ordinarily can be revived by scire facias within two years from the date it became dormant. The city asserted that Section 16.061(a) of the Civil Practices and Remedy Code exempted it from the two-year statute of limitations. Ellis filed a response arguing that laches barred the city’s motion, but did not challenge the city’s statute of limitations assertion. The trial court revived the modified judgment.

Ellis filed a motion for reconsideration and motion for a new trial, reasserting his laches defense and arguing that Section 16.061 did not exempt the city from the statute of limitations because the underlying claim was based on a subrogation interest belonging to the city employee, not the city. After a hearing, the trial court granted Ellis’ motion, vacated its order reviving the modified judgment, and ordered that the judgment is not revived and is considered dormant and unenforceable for all purposes. The city appealed, asserting that the ruling was in error because: (1) it established the necessary statutory requirements to revive the judgment; and (2) Ellis’ defenses of limitations and laches do not apply.

The city argued that it met all statutory requirements to revive the judgment and therefore that the trial court lacked discretion to deny its motion. In determining whether to issue a writ of scire fascias reviving a judgment, the trial court shall consider the date of the underlying judgment, evidence of any writs of execution, and the date of the motion to revive the judgment scire fascias. Chen v. Nguyen, No. 05–15–00077–CV, 2016 WL 258786, at *1 (Tex. App.—Dallas Jan. 21, 2016, no pet.). Though the city waited longer than two years to revive the judgment, it argued that it was exempt under Section 16.061, which provides “A right of action of this state or a political subdivision of the state, including … an incorporated city … is not barred by any of the following sections [of the Texas Civil Practice and Remedies Code]: … 31.006 ….”

Here, Ellis argued that the city was asserting a subrogation interest in its employee’s claim, not its own “right of action.”  The court disagreed, reasoning that the city was seeking to invoke Section 16.061 and avoid the statute of limitations for a judgment for conversion, resulting from the city’s suit against the employee’s attorney who refused to pay the city what it was owed. The city, therefore, was asserting its own “right of action” and an employee’s, and was thus entitled to exemption.

The court also rejected Ellis’ laches defense. Laches is an equitable defense that prevents a plaintiff from asserting a claim due to delay—“not mere delay but delay that works a disadvantage to another.” Culver v. Pickens, 176 S.W.2d 167, 170-71 (Tex. 1943). Two essential elements must exist for laches to bar a claim: (1) a party’s unreasonable delay in asserting a legal or equitable right; and (2) a good-faith change of position by another to his detriment because of the delay. Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 80 (Tex. 1989).

Ellis claimed he was harmed by the city’s delay in reviving the judgment because: (1) post-judgment interest had more than tripled the original judgment; and (2) he is no longer eligible to serve on city boards or commissions. In support, Ellis asserted in his affidavit that he intended to pay the city but held the impression that the city was willing to negotiate and settle for less than the judgment. He also asserted that, as a result of his conflict with the city, he is no longer eligible to serve on board and commissions and has suffered damage to his personal and professional reputations. The court reviewed the affidavit and concluded that there was no evidence that Ellis had a good faith, detrimental change in his position because of the city’s delay, nor evidence that the city offered to settle for less than it was owed. The damage to Ellis’ reputation and  increase in the amount owed in interest, the court said, was due solely to Ellis’ failure to pay a judgment he owed. The court reversed the trial court order granting Ellis’ motion for reconsideration and a new trial and granted the city’s motion for scire facias.

Tax Suit: City of El Paso v. Mountain Vista Builders, Inc., No. 08-15-00186-CV, 2017 WL 912154 (Tex. App.—El Paso March 8, 2017). The City of El Paso filed suit on May 18, 2009, over property taxes allegedly owed on multiple tracts of land that were or had been owned by Mountain Vista Builders, Incorporated (Mountain Vista).  Mountain Vista answered with a general denial.  Mountain Vista did not contest that it owned the properties at the relevant date for assessing taxes but, instead, presented testimony that it was developing the properties by building homes and then selling the tracts, arguing that any outstanding taxes due on the land should have been addressed before title passed to the buyers.  Mountain Vista argued the title company should have been alerted to any notice of a tax deficiency prior to closing.  Mountain Vista also argued its procedure of paying the taxes was hampered by the El Paso Central Appraisal District (CAD) which sent tax notices to the wrong business address; it learned of the claimed delinquent tax bills from its bank in 2011 after all the tracts had been sold and the title company had gone out of business.

The city argued that any claim of lack of notice had to first be presented to the CAD.  The court agreed, holding that a taxpayer who claims lack of notice from the taxing entity as a defense must pursue an available administrative remedy upon learning of the claimed tax liability.  The city also complained of the admission of evidence and findings supporting affirmative defenses (such as waiver or estoppel) that were never pled.  The court again agreed with the city, concluding that a taxpayer can’t avoid tax liabilities at trial based on affirmative defenses that were never raised in a defensive pleading.

Tort Claims Act: Brown v. Corpus Christi Reg’l Transp. Auth., No. 13-15-00188-CV, 2017 WL 929484 (Tex. App.—Corpus Christi March 9, 2017) (mem. op.). This is an appeal from the granting of a plea to the jurisdiction in a Texas Tort Claims Act case. The Thirteenth Court of Appeals affirmed the granting of the plea.

A Corpus Christi Regional Transportation Authority (RTA) bus stopped at a bus stop to load and unload passengers. Brown did not initially board as he had fallen asleep while waiting. As the RTA bus began to move again, one passenger asked the driver to stop so he could get off. The bus driver stopped and the passenger departed. As the bus began to move again, Brown woke up and attempted to board the bus. He lost his balance, fell to the ground, and the bus’s rear tire ran over Brown’s left arm. The investigating police report attributed fault solely to Brown. RTA’s own investigation did not find any fault on the part of the bus driver. Two years later, Brown sued for negligence. RTA filed a plea to the jurisdiction asserting a lack of statutory and actual notice under the Texas Tort Claims Act (TTCA). The trial court granted the plea and Brown appealed.

It is undisputed that Brown failed to provide a written notice within six months under Section 101.101 of the TTCA. To succeed, Brown must establish RTA had actual notice of the claim. Texas law has rejected the theory a governmental entity must have actual knowledge only of an injury. To qualify as actual knowledge under the notice provision of the TTCA, an entity must have a subjective awareness of its fault in producing or contributing to the injury or damage.  RTA provided an affidavit establishing how RTA conducted the internal investigation, what it was told, what it discovered, and that nothing indicated RTA was at fault. A certified copy of the police report indicated Brown was solely at fault. The Texas Supreme Court has held that “when a police report does not indicate that the governmental unit was at fault, the governmental unit has little, if any, incentive to investigate its potential liability because it is unaware that liability is even at issue.” As a result, no subjective awareness of fault existed and the plea was properly granted.

Tort Claims Act: City of Pharr v. Herrera, No. 13-15-00133-CV, 2017 WL 929483 (Tex. App.—Corpus Christi March 9, 2017) (mem. op.). This is an interlocutory appeal from the denial of a plea to the jurisdiction for a wrongful death claim under the Texas Tort Claims Act. The Thirteenth Court of Appeals reversed and rendered judgment for the city.

The city’s police officer, Emilio Gonzalez, attempted to conduct a traffic stop. When the vehicle driven by Rafael Quintero failed to stop on command, Officer Gonzalez pursued the vehicle into the City of Alamo. Other law enforcement agencies joined the pursuit. Sometime afterwards, Gonzalez disengaged his pursuit but others did not. While two Hidalgo County sheriff’s deputies were continuing pursuit, Quintero struck Reynaldo Herrera’s vehicle. Herrera later died due to the injuries. His family sued the city for initiating the chase. The city filed a plea to the jurisdiction asserting governmental immunity which the trial court denied. The city appealed.

For waiver of immunity, the vehicle’s use “must have actually caused the injury.” In addition, “a government employee must have been actively operating the vehicle at the time of the incident.” Herrera’s expert provided testimony that Officer Gonzalez “got the momentum going” by initiating the chase when such a chase was not appropriate based on weak, legally-faulty, or non-existent justification for the pursuit. He believed Gonzalez was at fault. However, the court disagreed: “The actual cause of the collision was Quintero’s decision to flee from police officers.” Officer Gonzales had ended his pursuit and was not present when the accident occurred. The evidence in this case does not support a casual nexus between Officer Gonzalez’s use of his vehicle and the plaintiff’s injuries. As a result the plea should have been granted.*

*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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