Recent Texas Cases of Interest to Cities

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

Tort Claims Act: City of Austin v. Frame, No. 03-15-00292-CV, 2017 WL 1832485 (Tex. App.―Austin May 5, 2017) (mem. op.). The Austin Court of Appeals withdrew the opinion and judgment in this case that was originally decided May 27, 2016, and substituted this opinion.

This recreational use/personal injury case involved Joseph Rosales jumping the curb and driving onto a hike-and-bike trail. In so doing, his vehicle and debris struck and killed Colonel Griffith and injured Diana Pulido. The appellees (Griffith’s estate and Pulido) sued the city for, among other things, failure to construct a guardrail or barrier for a known danger, which was allegedly a failure to carry out a ministerial act. The city filed a plea to the jurisdiction, which was denied. The city appealed.

The sole issue on appeal is whether the appellees’ allegations concern discretionary roadway design, as the city contends, or a negligent failure to implement a previously formulated policy, as the appellees contend. Texas courts have generally found that actions and decisions implicating social, economic, or political considerations are discretionary while those that do not involve these concerns are operational- or maintenance-level. The court analyzed the facts and policies alleged. It held that even if the city had a policy to fix identified hazards, “. . . it does not necessarily follow that the City’s failure to address this particular hazard was negligent policy implementation for which immunity is waived. The policy that the appellees describe does not mandate the construction of a guardrail or barrier with sufficient precision to make that action nondiscretionary. . . . Rather, it requires the City to balance social and economic concerns and devise a plan to address each specific identified hazard. This demands a level of judgment . . .” which equates to discretionary actions.  Further, even if the city had made a specific decision to modify the area, “immunity does not vanish where a governmental entity has decided to change the design of a public work but has not yet implemented that change.” The court reversed the district court’s order denying the plea and rendered judgment dismissing the case.*

Contracts: Hughes v. Tom Green Cty., No. 03-16-00132-CV, 2017 WL 1534203  (Tex. App.—Austin Apr. 20, 2017) (mem. op.). This is a breach of contract case where the Austin Court of Appeals affirmed the granting of the county’s plea to the jurisdiction.

Hughes’s uncle, Duwain E. Hughes, Jr., by his will, gave the county his home and remainder estate in order to establish a branch of the Tom Green County Library, and required it be named after him. He also gave Southern Methodist University (SMU) certain mineral interests in order to establish an endowment chair in the SMU English Department. The mineral interests exceeded the amounts needed to maintain the chair. The county intervened in a probate application asserting it was entitled to the excess funds since it was bequest the residuary estate. Charles Hughes, as heir, intervened alleging the “residuary estate” bequest had lapsed. The parties entered into a mediated settlement agreement (MPA) where Hughes and the county agreed to split equally the excess proceeds.  The county used its funds to remodel the current library, but did not name it after Duwain Hughes. Charles Hughes sued alleging a breach of the MPA. The county filed a plea to the jurisdiction, which the trial court granted. Hughes appealed.

The court first held the city did not waive immunity by intervening in the SMU litigation. The voluntary litigation exception to immunity is limited to claims related to and defensive to claims asserted by the governmental entity. In other words, a governmental entity waives its immunity only as to claims asserted by the party it has sued.  Here, the county did not make a decision to seek affirmative relief from Hughes and asserted no claims to which Hughes filed related defensive claims. The county filed its plea in intervention against SMU before Hughes was a party.  When Hughes did become a party, it was only against SMU, not the county. Therefore the MPA is not related to an underlying claim for which immunity is waived. The county also did not waive immunity by conduct. The trial court properly granted the plea.*

Contracts: Romulus Group, Inc. v. City of Dallas, No. 05-16-00088-CV, 2017 WL 1684631 (Tex. App.—Dallas May 2, 2017) (mem. op.). This is a breach of contract case where the Dallas Court of Appeals reversed an order granting the city’s plea to the jurisdiction.

Romulus won a bid for a 36 month contract to provide temporary clerical and professional labor. Romulus provided employees within 25 categories of job types. Romulus asserts the city began redesignating employees into a catch-all category of “clerical not listed” and paying a lower rate below the contracted rate for the true category. The city eventually terminated the contract under the termination clause. Romulus made a demand for $1.6 million in underpayment due to the unauthorized redesignations. When the city refused to pay, Romulus sued for breach of contract under Chapter 271 of the Texas Local Government Code. The city filed a plea to the jurisdiction which the trial court granted. Romulus appealed.

The city argued Romulus provided employees who did not fit into any of the 25 categories willingly, so they could not complain they were not paid under the contract. Romulus asserts the employees did fall under the contract and the city’s redesignation gives an appearance of extra-contractual services. The court found the city’s argument does nothing more than create a fact issue on the merits of the underlying claim. Further, Romulus pled that when it came time to pay for services provided, the city paid at a lower rate than allowed by contract.  By way of example, a coordinator II position was bid at $23/hour, but the evidence submitted shows the city modified the pay to $21.92/hour, which was calculated by paying $18 an hour times 21.8% as a mark-up. Such indicates the city underpaid as to what was due and owed in order to establish jurisdiction. The city also asserted Romulus failed to provide timely notice of a claim. However, the court of appeals has previously concluded the notice provision in Section 271.154 is an affirmative defense to the merits of the suit, not a matter that deprives the trial court of subject matter jurisdiction. The order granting the plea was reversed and the case remanded.*

Employment: Smith v. City of Garland, No. 05-16-00474-CV, 2017 WL 1439699 (Tex. App.—Dallas Apr. 20, 2017). This dispute involves promotions in the City of Garland fire department. Originally, the city sued Randy Smith and many other city fire fighters after allegations of cheating on civil service examinations that qualified employees for a promotion. The city voluntarily dismissed Smith from the suit because he did not take the exam in question. However, he intervened and sued the city. The city moved to strike Smith’s intervention and for entry of final judgment. The trial court granted the motion, and Smith appealed.

Smith asserts three issues in his appeal: (1) he had standing to file a motion for new trial, so his notice of appeal was timely; (2) the trial court abused its discretion in striking his intervention; and (3) the trial court’s judgment is void for lack of subject matter jurisdiction.

The Dallas Court of Appeals concluded that Smith’s motion for new trial did extend the appellate timetable, his notice of appeal was timely, and the court had jurisdiction over the appeal. As for Smith’s second issue, the court noted that there was no administrative remedy for the city to exhaust before seeking declaratory judgment because no party sought to challenge grades and the method of grading of the civil service exam or any commission decision. Instead, the dispute was over how to fill resulting vacancies in accordance with civil service law. Thus, the court concluded that the trial court properly exercised its jurisdiction over the suit.

In deciding Smith’s last issue, the court concluded that Smith failed to demonstrate a justiciable interest in the controversy since he did not take the test in question. Nor did he show that he would have or should have been promoted. The court also concluded that Smith’s intervention would complicate the case, and he failed to establish that the intervention was essential to protect his interest. Thus, the court overruled each of Smith’s issues and affirmed the trial court’s decision.

Employment: Jackson v. Port Arthur Indep. Sch. Dist., No. 09-15-00227-CV, 2017 WL 1425589 (Tex. App.—Beaumont Apr. 20, 2017) (mem. op.). In this employment dispute asserting constitutional claims, the Beaumont Court of Appeals affirmed the granting of the school district’s plea to the jurisdiction.

Jackson had an employment contract with the Port Arthur Independent School District. She was a principal at a local elementary school and was reassigned as an assistant principal at a high school. Jackson asserts the move violated her rights to free speech and interfered with her property rights. Jackson alleges that Superintendent Brown demoted her based on criticisms that she made about the matters at the elementary school involving issues of staffing, scheduling, learning plans, and services. Brown and the district filed pleas to the jurisdiction, which the trial court granted. Jackson appealed.

Jackson’s contract shows she was subject both to being reassigned to other schools and to being reclassified into other positions. As a result, she did not have a property interest in her principal position via contract. Jackson’s pleadings contain very few facts to support her claim that she was otherwise deprived of any constitutionally protected rights. To survive a plea to the jurisdiction, a plaintiff is required to plead a facially valid constitutional claim. Jackson did not provide the trial court with any evidence to rebut the fact that her contract allowed her to be reassigned and to be reclassified. Further, before any substantive or procedural due process rights attach, a plaintiff must show that they have either a liberty interest or a property interest that is entitled to constitutional protection. Here there are none. Jackson failed to plead sufficient facts to show that her speech was protected under either the state or federal constitutions. Her complaints were employee based, not citizen based and not on matters of public concern. As a result, the trial court properly granted the pleas.*

Substandard Structures: House of Praise Ministries, Inc. v. City of Red Oak, No. 10-15-00148-CV, 2017 WL 1750066 (Tex. App.—Waco May 3, 2017) (mem. op). In this case, House of Praise Ministries, Inc. (HOP) appeals a district court order granting the city’s plea to the jurisdiction.

HOP bought property in the city to build a new church. A brick structure and mobile home park were on the property when HOP bought it. Instead of building a church, HOP paid on the property loan with rentals from the mobile home park. In 2013, the city’s municipal court held a hearing, found the property substandard, and ordered HOP to make specified repairs or demolish and remove the brick structure and mobile home park.  HOP filed a motion for new trial which was overruled by operation of law and then filed a petition for review in district court. The city filed a plea to the jurisdiction. The district court granted the city’s plea. HOP appealed, raising complaints about the trial court’s evidentiary rulings and attacking the order on the merit of the plea to the jurisdiction.

HOP’s complaints about the trial court’s evidentiary rulings were overruled. As for the plea to the jurisdiction, the city alleged that HOP failed to timely perfect its appeal of the municipal court’s order as required by Local Government Code 214.0012(a) (requiring a petition be filed within 30 calendar days). The time for filing a verified petition is triggered when a copy of the final order is delivered in one of three methods: personal delivery, delivery by mail, or mailing by first class mail. And personal delivery means hand-delivered, in person, to the owner, lienholder, or mortgagee of record aggrieved by the order. Even though HOP had a copy of the order, the city did not provide proof of delivery of the signed final order by any of the three alternative methods provided in statute. Thus, HOP’s amended verified petition was filed within 30 days and the court’s jurisdiction was invoked. (In addition to being timely filed, Section 214.0012(a) requires a verified petition set forth why the final order is illegal and specify the grounds of the illegality. The Waco Court of Appeals held that this is not a jurisdictional prerequisite.)

HOP also attacked the trial court’s order on the plea to the jurisdiction claiming it had sufficiently pled regulatory taking and due process violations. HOP asserted the city’s enforcement of code violations (not the code provisions themselves) constitutes a regulatory taking.  As a result, the court held HOP did not assert a claim for a regulatory taking over which the court would have jurisdiction. HOP’s procedural due process claim was essentially that more detailed descriptions of the violations should have been given by the city. This is not a valid procedural due process claim and the court didn’t err in granting the plea to the jurisdiction on this claim.

While neither the regulatory taking nor due process claims can be cured through amended pleadings, the court of appeals held that HOP must be given the chance to amend its substantive due process pleadings to allege a sufficient claim. If HOP is unable to assert facts that make a prima facie case for a violation of substantive due process, the court may then properly dismiss HOP’s claim on a plea to the jurisdiction. The lower court’s judgment is affirmed in part and reversed and remanded in part.

Recreational Use: Jackson v. City of Texas City, No. 13-16-00179-CV, 2017 WL 1455091 (Tex. App.—Corpus Christi Apr. 20, 2017) (mem. op.). This is a wrongful death action where the Corpus Christi Court of Appeals affirmed the granting of the city’s plea to the jurisdiction under the recreational use statute.

Plaintiffs and their daughter Kaloni attended a family reunion at a city park. During the event, Kaloni wandered into the pond and drowned. It was undisputed that the city had posted at least one warning sign near the ponds which read “No Swimming, Beware of Snakes.” The parties also agreed there were no barriers or fences along the edge of the pond nearest to the playground. The parents sued the city alleging negligence and gross negligence. The city filed a plea to the jurisdiction and later supplemented. The trial court granted the plea and the plaintiffs appealed.

To defeat immunity in a premises case, it must also be established that the government-defendant had a duty to warn or protect the injured party. A landowner has no duty to warn or protect recreational users from open and obvious defects or conditions. Under the gross negligence theory, there must be legally sufficient evidence that the city had actual, subjective awareness that conditions at the pond involved an extreme degree of risk but nevertheless was consciously indifferent to the rights, safety, or welfare of others. After analyzing the facts, the court held the city carried its initial burden by presenting evidence which negated the subjective-awareness component. A pond is open and obvious as a possible danger. The city was unaware of any risk which went beyond that a reasonable recreational user would be aware. Further, the posting of warning signs is usually sufficient to avoid a finding of conscious indifference. As a result, the trial court properly granted the plea.*

Texas Tort Claims Act: Reaves v. City of Corpus Christi, No. 13-15-00057-CV (Tex. App—Corpus Christi Apr. 13, 2017). This is a Texas Tort Claims Act police chase case where the Corpus Christi Court of Appeals reversed the granting of a Rule 91a motion to dismiss based on immunity. This is a 35 page opinion which goes through a detailed analysis of Rule 91a.

A city police officer initiated a high-speed chase against a suspect, Balboa, who eventually ran a stop sign and collided with plaintiff’s vehicle. Instead of filing a plea to the jurisdiction, the city filed a Rule 91a motion to dismiss based on immunity, which the trial court granted. Reaves appealed.

The city’s motion is based on the assertion it was Balboa who collided with the plaintiff’s vehicle, so there is no nexus with any city employee’s operation of a motor vehicle. The court may not consider evidence in ruling on a 91a motion and must decide the motion based solely on the pleading.  Rule 91a declares that the trial court “must” grant or deny the motion within 45 days after it is filed. The court first considered the plaintiff’s argument the order was signed by the court 159 days after the filing of the motion, well beyond the 45 days. However, even though the words “must” and “shall” are mandatory, failure to comply does not equate to jurisdiction.

Other circuits have held Rule 91a issues are not jurisdictional; this court agreed, but based on different reasoning. The legislature prescribed no consequence for non-compliance. Unlike other rules which overrule a motion as a matter of law, Rule 91a remains silent. The court felt this was a clear indication non-compliance is non-jurisdictional to the movant. Additionally, correction by mandamus was an effective way to serve the purpose of Rule 91a.  Next, the court held that since the trial court could not consider evidence in considering the motion, the fact the trial court engaged in evidentiary inquiries relating to the motion was error. After a detailed analysis and review of other court holdings, the court ruled a Rule 91a motion is not a plea to the jurisdiction. While some similarities in the standards exist, they are separate procedures. After analyzing the plaintiff’s petition under the standard the court adopted (retaining a fair notice standard and rejecting a factual standard), it held the pleadings, taken as true and liberally construed, were sufficient to allege an appropriate causal connection to trigger jurisdiction.*

Public Improvement Districts: MHI P’ship, Ltd. v. City of League City, No. 14-15-00457-CV, 2017 WL 1450563 (Tex. App.—Houston [14th Dist.] Apr. 18, 2017). In 1997, the City of League City established the League City Public Improvement District Number One (PID). The city adopted a service and assessment plan by ordinance, which included a specific assessment rate to fund both phase one and phase two of the public improvement projects. Later, the city commissioned an audit to reconcile the actual cost of phase one and phase two, which ultimately showed that the city collected more than $1.7 million in excess funds after the developer had been fully reimbursed.   

After the city filed a petition in interpleader in the trial court, the trial court ultimately rendered a final judgment ordering that the funds available for each property be distributed to the legal title owners of each property appearing of record as of the date of the trial court’s judgment. MHI Partnership, Ltd., who had purchased various residential lots located within the PID, appealed the trial court’s judgment.

On appeal, the court initially found that there was no trial evidence to support several findings of fact by the trial court. Additionally, the court held that the trial court erred in concluding that the refund amount for each property should be distributed to the holder of record title to each property as of the date of the trial court’s judgment. The language in the city’s ordinance provided that the excess assessments should be refunded to “parties having an interest in such funds.” Using this language, the court reasoned that the interpleaded funds should be distributed for each property to the property owners who paid the assessments at the initial rates based on a pro rata formula instead of going to the property owner as of the date of the trial court’s judgment, as those owners may not have actually paid any of the assessments. The appellate court reversed the trial court’s judgment and remanded for further proceedings.

*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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