Recent Texas Cases of Interest to Cities

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

Torts Claim Act: Fort Worth Transp. Auth. v. Rodriquez, No.16-0542, 2018 WL 1976712 (Tex. April 27, 2018). This is a statutory-construction case on the damages-cap and election-of-remedies under the Texas Tort Claims Act (TTCA).

After Peterson, a pedestrian, was struck and killed by a public bus in Fort Worth, her daughter, Rodriguez, sued the Fort Worth Transportation Authority (FWTA), its two independent contractors (MTA and MTI), and the bus driver (Vaughn) under the TTCA. Rodriguez pled a single count of negligence against all defendants collectively. FWTA is a regional transportation authority, a governmental unit under the Transportation Code, and performs governmental functions. Rodriguez asserted FWTA, MTA, and MTI were engaged in a joint venture and vicariously liable for each other’s actions, but Vaughn is only employed by the independent contractor, so cannot take advantage of the election of remedies under Section 101.106 of the TTCA. The trial court denied Rodriguez’s motion and granted summary judgment in favor of the defendants, ruling that FWTA, MTI, and MTA should be treated as a single governmental unit under the TTCA, limiting Rodriguez’s claim to a maximum recovery of $100,000.

The court of appeals reversed in part, holding that FWTA, MTI, and MTA were separate entities—each subject to a separate $100,000 damages cap, for a total of $300,000—and that Vaughn, an employee of MTI, was not an employee of a governmental unit and therefore was subject to unlimited personal liability. The Texas Supreme Court granted the petition for review.

Texas Transportation Code Section 452.056(d) provides that an independent contractor of a transportation authority, while not a governmental entity, is liable for damages only to the extent that the authority or entity would be liable if the authority or entity itself were performing the function. The court first analyzed the damage cap language and held the TTCA does not allow the imposition of liability above $100,000 for a single person. The fact that FWTA delegated its transportation-related governmental functions to independent contractors, as it is statutorily authorized to do, does not somehow expand the potential liability arising from those governmental functions. Next, the court analyzed Section 452.056. Since an authority is only allowed to perform governmental functions, but is allowed to contract for the performance of those functions under the statute, the contractor, by extension, is performing governmental functions. That does not grant the contractors immunity, but does limit their liability in the performance of those functions. Likewise, if Vaughn had been employed directly by FWTA, she would be entitled to protection under the TTCA’s election-of-remedies provision. That MTI provided Vaughn’s services to FWTA makes no difference. She is permitted to take advantage of Section 101.106. Finally, the Court held the defendants were not entitled to attorney’s fees.

The dissent focused on the fact that Section 452.056 does not list independent contractors as governmental units. As a result, Justice Johnson believes that while the caps apply, they are not cumulative and Rodriguez should be entitled to $100,000 from each defendant.*

Land Use: Schmitz v. Denton Cty. Cowboy Church, No. 02-16-00114-CV, 2018 WL 2144141 (Tex. App.—Fort Worth May 10, 2018) (mem. op.). In 2014, the Denton County Cowboy Church (church) purchased property zoned single family residential under the Town of Ponder’s zoning ordinance. The church’s property is adjacent to the plaintiffs’ property. According to Town of Ponder’s comprehensive plan, the plaintiffs’ properties are designated for future low-density residential zoning. In 2015, the church began construction of an arena. The town issued a building permit for an open arena. Plaintiffs sued the church and town, seeking injunctions prohibiting the church from continuing construction. They also brought claims under Section 1983 for due process, takings, and equal protection violations. At this time, the town voted to amend the zoning code and issued a special use permit (“SUP”) to the church, but did not pass an ordinance. The town and church filed a plea to the jurisdiction, which the trial court granted. The plaintiffs appealed.

The Second Court of Appeals issued an opinion and judgment in this appeal on August 31, 2017. On a motion of rehearing filed by Appellants Peter Schmitz, Sean Pollock, Larry La Duke, and Becky LaDuke and Appellee Denton County Cowboy Church, the court granted both motions for rehearing, withdrew its August 31, 2017 opinion and judgment, and issued a rehearing opinion without rebriefing or further argument.

The court was asked whether the trial court abused its discretion by denying the appellants’’ request for a temporary injunction or erred by granting the plea of jurisdiction filed by the church and the town in the context of appellants’’ suit for declaratory judgment, injunctive relief, civil-rights violations, and nuisance injuries arising from the town’s facilitation of and the church’s activities at its current and future rodeo arenas. The court did a de novo review and reviewed appellant’s claims against the town and the church separately.

The court reviewed appellant’s four claims against the town: (1) Uniform Declaratory Judgment Act; (2) 42 U.S.C.A. § 1983; (3) private-nuisance injuries; and (4) permanent injunctive relief.  The court determined that the trial court did not err by dismissing the majority of the appellants’ UDJA request because the appellants challenged the town’s actions contrary to its ordinances instead of the validity of the ordinance. In doing this, the town’s governmental immunity was not waived under the UDJA.  Also, the appellants argued that the town implicitly waived its own immunity under the UDJA by implicitly waiving it by ordinance. The court stated that governmental immunity was not waived because the ordinance did not constitute a clear and unambiguous waiver of the town’s immunity. However, the appellants’ argument concerning violation of the Open Meetings Act (OMA) did have a limited waiver of immunity and conferred subject-matter jurisdiction on the trial court. Therefore, the trial court did err by granting the town’s plea to the jurisdiction regarding declaratory requests based on the violation of the OMA, on the violations of the town’s ordinance enacted under the OMA and dismissing the appellants’ attorneys-fee claims arising from their OMA-based, UDJA claim.  Also, the court’s review of the UDJA claims concerning the clear and unambiguous waiver of governmental immunity applied to the appellants’ private-nuisance injuries claim. The court found that appellants did not affirmatively demonstrate that the trial court had jurisdiction over this claim and, therefore, the trial court did not err by granting the town’s plea directed to the private-nuisance injuries claim.

Under the Section 1983 claim, appellants’ claimed the town violated their civil rights by failing to ensure appellants’ due-process rights were protected, committed a taking of property without just compensation, and engaged in impermissible spot zoning.  Appellants had the burden to present jurisdictional facts to sufficiently establish that their taking claims were viable in order for the town’s governmental immunity to be waived. However, a governmental unit’s refusal or failure to enforce its own regulations or ordinances is not considered a viable takings claim. The appellants challenged the manner in which the town enforced its ordinance, instead of failure to enforce its ordinance.  Therefore, the Appellants failed to allege a viable takings claim that would waive the town’s immunity and the trial court did not err by granting the town’s plea on this argument and the dismissal of attorney-fee claims.

The court determined that the appellants’ also failed to affirmatively demonstrate the trial court’s jurisdiction to their permanent injunctive relief claim when it dealt with the town’s alleged violations of or failures to enforce its zoning ordinance. The waiver of governmental immunity for this claim is based on allegations of the governmental officials violating the law or exceeding their powers, not failure to enforce their ordinance. However, the appellants’ permanent injunctive claims when it came to the alleged violation of the OMA did statutorily waive the town’s governmental immunity since the town did not follow its notice provisions in its zoning ordinance.

Also, the town’s argument that the Religious Land Use and Institutionalized Persons Act (RLUIPA) mandated that it allow construction and operation of the arena and divested the trial court of jurisdiction over the appellants’ remaining claims was not effective because RLUIPA is not equivalent to governmental immunity.  The court stated that the RLUIPA was not appropriately raised in a plea to the jurisdiction. The RLUIPA is a defensive tool, not an immunity from governmental activity regarding religious institutions.

Next, the court reviewed the church’s arguments concerning standing for the appellants’ claims for declaratory and injunctive relief and nuisance injuries. The court determined that the appellants did not have standing concerning their claims of declaratory and injunctive relief because the church was not the entity with the power to enforce the town’s zoning ordinances. Only the town was allowed to enforce its zoning ordinance based on the power given to the town by the legislature in Chapter 211 of the Local Government Code. The trial court did not err by granting the church’s plea to the jurisdiction concerning these claims.

As for standing in regard to the private nuisance claims, the appellants had to show that the violation of a zoning ordinance would cause them to suffer damages or injury beyond that would be suffered by the general public and that the damages or injuries are concrete and particularized, and actual or imminent. Of the appellants, the court found that only Mr. Schmitz was able to produce evidence of a particularized, imminent injury, while the other appellants were not. Therefore, the trial court erred in in granting the church’s plea directed at Mr. Schmitz’s claim, but not at the other appellants’ private-nuisance claim.

Finally, the court reviewed the appellants’ argument that the trial court erred by denying their request for a temporary injunction against the town and the church. To obtain a temporary injunction, the appellants must plead and prove: (1) a viable cause of action; (2) a probable right to the relief sought; and (3) that a probable, imminent, and irreparable injury will occur prior to the final judgment. For the trial court’s denial to be considered an error, the trial court would have to abuse its discretion. After reviewing the court record, the court determined that the trial court did not abuse its discretion in denying the temporary injunction since it could not conclude that the trial court clearly abused its discretion.

In conclusion, the court affirmed in part and reversed in part the trial court’s order and remanded limited portions of the case to the trial court for further, consistent proceedings.

Governmental Immunity: City of San Saba v. Higginbotham, No. 03-17-00408-CV, 2018 WL 2016463 (Tex. App.—Austin May 1, 2018) (mem. op.). This is an immunity case where the Austin Court of Appeals reverses the trial court’s order in part and renders judgment dismissing a breach of contract claim against the city.

The Higginbothams brought tort claims against the city and San Saba Pecan, LP, (company) after sewage backed up into their house. They alleged that the incident occurred because the company dumped pecan shells and residue into the public sewer system, and the city was aware of and allowed this to occur. All three parties eventually entered into a settlement agreement to equally split the cost of repairing the Higginbotham’s property in return for the Higginbotham’s promise to release the defendants from all liability if they were satisfied with the repairs. The city then filed a plea to the jurisdiction requesting the suit be dismissed. The Higginbothams amended their claims, arguing the city committed anticipatory breach of the settlement agreement by filing the plea. The trial court granted the city’s plea as to the tort claim but denied the plea as to the breach of contract claim, concluding that the city was acting in a proprietary function.

The city appealed the trial court’s denial of its plea on the contract claim, arguing the relevant action to consider is the operation of the sewer system. The Higginbotham’s argue the relevant action to consider is entering the agreement.

The Texas Supreme Court has held that a governmental entity does have immunity from suit for a breach of a settlement agreement when it is immune from the underlying lawsuit. In light of that case law, the Austin Court of Appeals court concludes the operation of the sewer system is a governmental function and the city is immune from suit (absent some waiver). Entering into the agreement did not negate the city’s immunity. The trial court’s order denying the city’s plea to the jurisdiction is reversed.

Extraterritorial Jurisdiction: Collin Cty. v. City of McKinney, No. 05-17-00546-CV, 2018 WL 2147926 (Tex. App.—Dallas May 10, 2018). In this statutory construction case, the Dallas Court of Appeals held City of McKinney lacks authority to enforce its building codes in its extraterritorial jurisdiction (ETJ), but it has authority to require a landowner to plat its property.

The city and Collin County previously entered into an agreement designating the city as the exclusive authority for platting and related permits.  Custer Storage Center, LLC (Custer) owns land located in the county and within the city’s ETJ and uses the property for a self-storage business. During construction, the city demanded Custer plat the property and obtain city building permits. When Custer refused, the city sought a declaratory judgment and injunction. All parties (city, county and Custer) filed summary judgment motions. The trial court concluded that the city’s and county’s respective authority to enforce platting and building permit requirements for property in the city’s ETJ is determined based on whether a property is subdivided and held the city could only require building permits if the property is subdivided.

The Dallas Court of Appeals analyzed the Texas Supreme Court’s opinion in Town of Lakewood Village v. Bizios, 493 S.W.3d 527 (Tex. 2016) and held that while a home-rule municipality has authority under the Texas Constitution within its borders, it requires express authority to regulate in the ETJ. The need for express authority applies to every city, regardless of type. Since no express authority allows extending building codes into the ETJ, the city cannot require building permits. However, the Texas Local Government Code does expressly authorize a city and county to designate the city as the exclusive authority for plat and subdivision regulations. That does not allow tagging the building codes onto the plat or subdivision ordinances. However, Custer’s construction plans clearly trigger a requirement for platting, which they did not perform.  Since the court significantly modified the judgment, it remanded back to the trial court to determine the issue of attorney’s fees.*

Extraterritorial Jurisdiction: City of Justin v. Town of Northlake, No. 06-17-00054-CV, 2018 WL 2027163 (Tex. App.—Texarkana May 7, 2018) (mem. op).  In this extraterritorial jurisdiction (ETJ) case, the Town of Northlake (Northlake) filed suit against the City of Justin (Justin) asking for, among other things: (1) a declaratory judgment: (a) that a 1997 “Joint Resolution and Agreement” (1997 Agreement) between Fort Worth and Northlake relating to both municipalities’ ETJ was legal and valid; (b) that the resulting ETJ boundaries were legal and valid; (c) that a certain Justin ordinance that added property to its ETJ was void ab initio and invalid; and (2) a permanent injunction regarding Justin’s development of the disputed property. Justin counterclaimed asking for a declaratory judgment: (1) that the 1997 Agreement between Fort Worth and Northlake was void ab initio; and (2) that Northlake’s resolution purporting to transfer the disputed property into Northlake’s ETJ was void ab initio and invalid. Both parties filed summary judgment motions, and the trial court granted the motion filed by Northlake.

Justin appealed contending that the trial court erred in granting Northlake’s motion for summary judgment and denying its motion for summary judgment. Justin also argues that because the trial court erred in granting Northlake’s motion for summary judgment, it also erred in awarding attorney fees in favor of Northlake.

The appellate court concludes that while former Local Government Code Section 43.021 gave home rule cities (like Fort Worth) authority to exchange areas with other cities, it did not address the authority of a general law city (like Northlake) to adjust its boundaries or exchange its ETJ. As for Justin’s argument that the exchange impermissibly expanded Northlake’s ETJ beyond the one-half mile provided in Section 42.021, the court concludes that Northlake provided no evidence that the area Fort Worth exchanged was within the one-half mile area. Because Northlake failed to establish that it was entitled to judgment as a matter of law, the trial court judgment is reversed and the case is remanded.

Governmental Immunity: Tabrizi v. City of Austin, No. 08-16-00209-CV, 2018 WL 1940556 (Tex. App.—El Paso Apr. 25, 2018). In this case, the El Paso Court of Appeals affirms the judgment of the trial court.

The case arises from a dispute between the Tabrizis and the City of Austin regarding the city’s denial of a plat application (because of certain environmental rules) and a subsequent denial of a plat exemption. The Tabrizis: (1) filed a declaratory judgment action against the city to construe several of its ordinances; and (2) sued several city officials claiming they acted ultra vires by misapplying the city ordinances. The trial court dismissed both claims on a plea to the jurisdiction. The Tabrizis appealed.

As to the first claim, the city argues that the Tabrizis’ petition asks the court to construe several ordinances and not invalidate them. The appellate court agrees and concludes that governmental immunity precludes the declaratory judgment against the city to construe its ordinances. Noting this holding is somewhat academic because the court must construe the ordinances to determine if the ultra vires claims are valid, the court then turns to the ultra vires claims.

The Tabrizis claim that city officials acted ultra vires in applying certain environmental rules to platting applications. After construing the city’s ordinances, the court overrules the claims. The court then considers whether the officials acted ultra vires in denying the Tabrizis an exemption from the subdivision platting requirement. The Tabrizis argued that, under the city’s ordinance, a property is exempt from platting if it: (1) is five acres or less; (2) existed in its current configuration on January 1, 1995; (3) was receiving utility services on January 1, 1995, as authorized under the rules of a utility provider; (4) is located on an existing street; and (5) complies with the requirements for roadway frontage. At issue is whether the property received utility service. The Tabrizis argued that the curb and gutter drainage facilities qualified the lot. Though not defined in the ordinance, the city argued “utility service” is limited to electric, water, wastewater, or gas service hook-ups. The court concludes that under a common dictionary definition, a street gutter that redirects water would not intuitively qualify as a utility service provided to a property. The court then finds that, even assuming the officials had some discretion to define the term “utility service”, the Tabrizis have not shown the officials’ interpretation conflicts with the ordinary meaning of “utility service.” This claim is overruled.

Finally, the appellate court agrees that the trial court did not err in denying the Tabrizis leave to amend. The judgment is affirmed.

Governmental Immunity: Texas Mun. League Intergovernmental Risk Pool v. City of Abilene, No. 11-17-00253-CV, 2018 WL 2142753 (Tex. App.—Eastland May 10, 2018). The City of Abilene purchased real and personal property insurance from the Texas Municipal League Intergovernmental Risk Pool (TML IRP) to cover over 400 structures located in Abilene. Following a June 2014 wind and hail storm, TML IRP evaluated the claim and ultimately paid the city a total of $6,948,132.78 for damages caused by the storm. In June 2016, the city submitted an additional Proof of Loss for damages amounting to $19,960,422.33. When the property wasn’t appraised, the city filed a breach of contract suit against TML IRP, arguing that TML IRP failed to properly investigate and evaluate the damage caused by the storm. The city filed an amended petition seeking damages under Texas Local Government Code Section 271.153 and sought to compel TML IRP to participate in the appraisal process to determine the amount of the city’s damages. TML IRP claimed that Local Government Code Section 271.152 did not waive immunity for a claim of specific performance related to the appraisal. The trial court denied TML IRP’s plea to the jurisdiction and granted the city’s motion to compel appraisal and abate the case. TML IRP appealed.

On appeal, the dispute focused on whether the Texas Local Government Contract Claims Act (Local Government Code Sections 271.151-.160) waives TML IRP’s governmental immunity for the city’s request for the trial court’s enforcement of the appraisal provision in the property coverage document. TML IRP asserted that the city’s request is a remedy that is not permitted, as specific performance is not authorized by Local Government Code Section 271.153. The city contended that the appraisal provision is a contractual adjudication procedure that is enforceable under Section 271.154 of the Local Government Code.

The court held that the city’s request for enforcement of the appraisal provision in the property coverage document is not a claim for specific performance. In the context of an insurance contract, appraisal is not sought in equity as a substitute for inadequate monetary damages, but rather is a procedural vehicle provided by the contract to determine the amount of loss. The court concluded that the appraisal provision constituted an alternative dispute resolution procedure because it settles a dispute regarding the amount of damages by means other than litigation. The appraisal provision was therefore an adjudication procedure under Local Government Code Section 271.154, and the request to compel appraisal was not considered a claim for specific performance, as argued by TML IRP. The court affirmed the trial court’s order denying TML IRP’s plea to the jurisdiction.

Civil Service: Dunbar v. City of Houston, No. 14-17-00156-CV, 2018 WL 1803233 (Tex. App.—Houston [14th Dist.] Apr. 17, 2018). Steven Dunbar, a senior captain with the Houston Fire Department, sustained an injury in 2012 and was placed on temporary-duty status. The department’s rules provide that a firefighter is required to submit a physician-completed medical questionnaire every 90 days while on temporary-duty status. On April 4, 2014, an assistant fire chief ordered Dunbar to submit a medical questionnaire. Dunbar responded that he had sent his medical documentation to a physician, but the physician refused to take his case. The assistant fire chief once again ordered a questionnaire on August 27, 2014. Once again, Dunbar failed to comply. A member of the department’s risk management office submitted a memorandum on October 14, 2014, reporting Dunbar’s failure to comply with the order. Dunbar was suspended for noncompliance with a superior’s order on April 8, 2015.

Dunbar filed a civil suit against the city and civil service commission to set aside the suspension. Dunbar’s primary argument was that he was suspended more than 180 days after the city knew or should have known of the infraction in contravention of Local Government Code Section 143.117(b): “[T]he department head may not suspend a fire fighter or police officer later than the 180th day after the date the department discovers or becomes aware of the civil service rule violation.” Both Dunbar and the city moved for traditional summary judgment. The trial court denied Dunbar’s motion for summary judgment and granted the city’s summary judgment motion. Dunbar appealed.

On appeal, Dunbar claims that his suspension was void as untimely based on Local Government Code Sections 143.117(b) and 143.117(d)(2). Because the department knew of his failure to return a completed medical questionnaire as early as April 23, 2014, and didn’t suspend him until April 8, 2015, Dunbar argued that the suspension was void. The city, meanwhile, argued that the date when the department discovered or became aware of a violation is when staff services received a verified complaint pursuant to Local Government Code Section 143.123. The court found the city’s argument under Section 143.123 unpersuasive, as the statute does not require a “verification” under the fact pattern at issue in the case. The verified complaint issued in October 2014 didn’t “restart the clock” on the 180-day window for imposing a suspension. According to the court, the city knew of Dunbar’s violation in April 2014.

Because the evidence conclusively established that Dunbar’s suspension was imposed more than 180 days after the department discovered or became aware of his failure to submit a medical questionnaire as required by department rules, the suspension was void. The court rendered judgment in Dunbar’s favor and ordered the records of the disciplinary action expunged from each file maintained by the department (other than any internal investigatory file or records maintained by an internal investigative division) in accordance with Local Government Code Section 143.1214.

*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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