Recent Texas Cases of Interest to Cities

Note:  Included cases are from September 11, 2013 through October 10, 2013. 

Billboards:  City of Grapevine v. CBS Outdoor, Inc., No. 02-12-00040-CV, 2013 WL 5302713 (Tex. App.—Fort Worth Sept. 19, 2013) (mem. op. on reh’g).  [A summary of the original memorandum opinion was included in the Recent State Cases paper presented at the June 2013 TCAA Conference.]  The Texas Department of Transportation (TxDOT) required a CBS billboard that partially overhung a TxDOT highway project to either be moved or made smaller. Two choices given to CBS by TxDOT were to change the angle the billboard was facing or to remove a 4 foot panel from the billboard.  First, CBS asked the city if it could change the angle of the billboard.  The city ordinance relating to this issue states that “[n]o sign, except for signs listed in Section 60, shall be painted, constructed, erected, remodeled, relocated, or expanded until a zoning permit for such sign has been obtained.”  Also, any “violation of any of the provisions of this Ordinance or violation of any Ordinance of the City of Grapevine with respect to a nonconforming use shall terminate immediately the right to operate such nonconforming use.”  Accordingly, the city refused to allow CBS to change the angle, and its letter stated that CBS could not move, alter, or adjust the sign.  Then CBS removed a four foot panel from the sign without obtaining a permit from the city.  The city informed CBS that it had violated city ordinances and their earlier decree and that the sign had to be removed.  CBS appealed this ruling to the board of adjustment, and the board of adjustment affirmed the city’s ruling.  CBS sued the city.

The city argued that CBS had failed to exhaust its administrative remedies because it had failed to timely appeal the original ruling of the city prohibiting the sign angle change and stating that CBS could not move, alter, or adjust the sign.  The court of appeals agreed, and the court overruled the trial court’s ruling on that issue.  CBS also sued the city for inverse condemnation. The court of appeals held that even though the sign had to be changed due to a TxDOT project, it was the city’s ordinances and rulings that caused a “taking” of the billboard owner’s property.  Thus, CBS was able to go forward with its inverse condemnation claim in the trial court.  The memorandum opinion on rehearing just clarified the exhaustion of remedies issue, holding that the city had made a broad enough statement in its original ruling to cover either the shifting of the sign or the alteration of the sign, and thus CBS should have appealed that ruling in order to have standing.

Property Tax: Waters at Northern Hills, L.L.C.  v. Bexar Appraisal Dist., Nos. 04-12-00820-CV, 04-12-00871-CV, 2013 WL 5477244 (Tex. App.—San Antonio Oct. 2, 2013).  This case arises from a property tax dispute between Waters at Northern Hills, a low-income apartment complex, and the Bexar Appraisal District (BAD).  The two entities disagreed on the installment agreement the parties signed promising an installment payment plan in exchange for exempting and reducing taxes Waters at Northern Hills would have to pay.  Waters at Northern Hills alleged BAD breached a duty of good faith, made continuing promises intended to induce them to sign the installment agreement, and requested a declaratory judgment on their tax exempt status.  The trial court granted the BAD’s plea to the jurisdiction in the case.  The San Antonio Court of Appeals decided that Waters at Northern Hills failed to file a petition for review within 60 days, as required by Texas Tax Code Section 42.21(a).  Therefore, the court affirmed the trial court’s decision in granting BAD’s pleas to the jurisdiction.

Collective Bargaining: City of San Antonio v. International Ass’n of Fire Fighters, Local 624, Nos. 04-12-00783-CV, 04-13-00109, 2013 WL 5508408  (Tex. App.—San Antonio Oct. 2, 2013). This is a dispute arising out of a collective bargaining agreement between the City of San Antonio and the Local 624 of the International Association of Fire Fighters (union). The union filed suit in district court, alleging the city unilaterally changed the terms of the parties’ collective bargaining agreement (CBA) regarding health-care benefits (but that issue is not reached in this opinion). The city claimed the union failed to exhaust its administrative remedies under the CBA and the dispute is subject to arbitration. The trial court denied the city’s motion to abate so the city pursued two alternative means of review, a petition for writ of mandamus and an interlocutory appeal. The San Antonio Court of Appeals held the claims must be submitted to arbitration. (The opinion generated a dissent.) The court first determined that since there is no statutorily-permitted appeal from a motion to compel arbitration, the proper mechanism for relief for a common law claim is the writ of mandamus. However, this case does not arise out of the common law but the CBA which incorporates the Federal Arbitration Act. As a result, the proper mechanism for appeal is the interlocutory appeal.  The union asserted its claims were statutory claims existing outside of the CBA. However, the Fourth Court disagreed. Because the union asked for a declaration the city changed health-care benefits without bargaining, it is improper to do so without first interpreting whether the CBA’s conditions have been altered. As a result, the claims are not separate from the contract and arbitration is required. Further, because the CBA expressly provides for abatement should either party fail to exhaust procedures under the contract, abatement is proper as opposed to dismissal.  In short, the city wins this round and the dispute goes to arbitration. The dissent essentially reasoned the union’s claims are statutory claims outside the CBA and therefore not subject to arbitration.*

Takings: Mira Mar Dev. Corp. v. City of Coppell, No. 05–10–00283–CV, 2013 WL 5524860 (Tex. App.—Dallas Oct. 7, 2013).  This case involves Mira Mar’s conflicts with the city in obtaining approval of a development, including delays and changes to the development plan that created increased costs and reduced the sale price of the lots. Mira Mar demanded the city compensate it for the increased costs and reduced sale price and sought a review of its grievances in a hearing before the city council pursuant to Section 212.904 of the Texas Local Government Code.  The city council approved procedures for the hearing, which did not permit appellant to cross-examine the city’s witnesses or present rebuttal evidence. At the conclusion of the hearing, the city awarded appellant $21,709.84 for taking .147 acre of land for a roadway. The city credited $18,444 toward outstanding roadway-assessment fees appellant owed on the project, which left $3,265.84 that the city owed Mira Mar.

Mira Mar appealed the council’s decision alleging violations of due process and federal and state takings claims in district court.  The trial court found that Mira Mar’s due process rights were violated and ordered the council to conduct a second hearing.  Mira Mar again appealed.  The trial court rendered judgment.  However, Mira Mar filed a third motion for summary judgment.  The city filed its first motion for summary judgment.  The court granted the city’s motion.  The Dallas Court of Appeals looked at all of the various costs and fees Mira Mar alleged it was owed for the city’s taking.  The court reversed the trial court’s judgment in part and rendered judgment that Mira Mar recover from the City compensation on various Mira Mar’s exaction claims of $96,930.  The court also reversed the trial court’s judgment on other exaction claims, then remanded to the trial court part of Mira Mar’s exaction claims.  The court further reversed the trial court’s denial of attorney’s fees to Mira Mar and remanded the claim for attorney’s fees to the trial court.

Governmental Immunity:  City of McKinney v. Hank’s Restaurant Group, L.P.,  No. 05-12-01359-CV, 2013 WL 5229996 (Tex. App.—Dallas Sept. 18, 2013).  Hank’s Restaurant Group filed a lawsuit against the City of McKinney alleging that city police officers had engaged in a ten year campaign of harassing restaurant employees and patrons.  During this harassment, the police officers allegedly disrupted live-music events falsely claiming the restaurant exceeded its occupancy limits and falsely claimed the restaurant had committed code violations.  The city also filed a petition under Chapters 54 and 211 of the Local Government Code alleging the restaurant’s violations created a danger to public health and safety and seeking permanent injunctive relief.  The city filed a plea to the jurisdiction in the case Hank’s filed.  The trial judge consolidated the two cases, denying the city’s plea.  The Dallas Court of Appeals found the city enjoyed governmental immunity from the restaurant’s claims that city officials were violating or misapplying the law.  However, the court looked closer at the claim that the city ordinances were invalid.  The court rejected Hank’s waiver-by-conduct argument and found Hank’s pleadings did not sufficiently address the waiver of immunity in the Vested Rights Act under Chapter 245 of the Local Government Code.  The Dallas Court of Appeals ultimately affirmed the trial court’s order denying the city’s pleas to the jurisdiction to the extent the judge ruled that Hank’s could proceed with its claims for monetary relief in an amount not to exceed the amount necessary to offset the city’s claim for attorneys’ fees in connection with the city’s claim for declaratory relief.  However, the court reversed the trial court’s order denying the city’s pleas to the jurisdiction with respect to Hank’s claims for declaratory and injunctive relief.  The Court rendered judgment dismissing Hank’s claims for declaratory relief and remanded to the trial court to give Hank’s an opportunity to amend its pleadings with regards to immunity under the Vested Rights Act.

Tort Claims Act:  Texas Dep’t of Transp. v. Ingram, No. 06-13-00047-CV, 2013 WL 5494598 (Tex. App.—Texarkana Oct. 4, 2013).   This is a Texas Tort Claims Act case where the plaintiff lost control over her vehicle and struck a ditch twelve hours after the Texas Department of Transportation (TxDOT) finished a limestone pre-mix overlay on the roadway. Ingram sued alleging the repairs were conducted improperly using the wrong materials, that warning signs should have been posted, and that excess pre-mix should have been swept away in order to keep the road safe. TxDOT filed a plea to the jurisdiction and a no-evidence motion for summary judgment arguing Ingram could not show TxDOT’s actual knowledge of the dangerous condition prior to the accident.  The trial court denied the plea and motion for summary judgment, and TxDOT appealed. The Sixth District Court of Appeals first examined whether this was a special defect case (where actual knowledge is not required) or a premise defect case (where actual knowledge is required). Interestingly enough, the court performed this analysis even though the parties agreed this was not a special defect case.  The analysis is interesting and can be cited for the proper standards to apply in special versus premise defects cases. But ultimately, the court agreed this was not a special defect. Next, after going through and commenting on a host of deposition testimony the court determined that no evidence of actual knowledge existed. The court emphasized that actual knowledge can be proven by circumstantial evidence, but only when it “either directly or by reasonable inference” supports that conclusion. Conclusions based on assumptions and approximations are not sufficient, even if done by an expert.  This analysis is a pretty good one for lawyers attempting to argue the actual knowledge prong of a premise defect defense since it examines the testimony in-depth before coming to the conclusion no actual knowledge existed. In the end, the court held the plea to the jurisdiction should have been granted.*

Employment:  City of Lubbock v. Hennsley, No. 07-12-00325-CV, 2013 WL 5043360 (Tex. App.—Amarillo Sept. 12, 2013). This is a police employment dispute under Texas Government Code Section 614.023 (or possibly Section 143.052).  The city appealed a hearing examiner decision and the trial court granted the police officer’s plea to the jurisdiction. The Amarillo Court of Appeals reversed, holding the hearing examiner exceeded his authority by picking and choosing which alleged actions of wrongdoing to consider.

Chapter 614 essentially applies to non-civil service cities and provides that: (1) an officer cannot be disciplined without a written complaint being filed, (2) an officer must be given a copy of the complaint, and (3) an officer must have an opportunity to respond.  Officer Hennsley received a notice from his captain describing an incident of possible excessive force. During the investigation of the incident, Hennsley received a second letter with additional charges. He was given the opportunity to respond to both before being terminated.  However, the hearing examiner expressly stated he was only considering certain charges. The hearing examiner reversed the termination and modified the disciplinary action to a 15-day suspension. The city appealed.  The city argued Chapter 614 was inapplicable, and that Section 143.057(j) of the Texas Local Government Code was the proper standard (dealing with civil service agreements).  The trial court granted Hennsley’s plea to the jurisdiction (the opinion is unclear as to the basis of the plea). The court noted in a footnote that because of its ultimate decision, it need not address whether Chapters 614 or 143 should have been used. The court noted that Hennsley was given both charges in writing and an opportunity to respond before any disciplinary action was taken. Adopting City of Houston v. Wilburn, No. 01-12-00913-CV, 2013 WL 3354182 (Tex. App.—Houston [1st Dist.] July 2, 2013, no pet. h.), the court held charges of wrongdoing need not be contained within a single document. A hearing examiner’s jurisdiction is very narrow and the examiner has no jurisdiction to rule in a manner not authorized by statute. Nothing provided the “examiner any type of discretion to pick and choose which accusations to review.” By doing so he implemented his own procedural rules “regarding the quantum of prior notice that should be afforded, applied it retroactively to the situation at hand, and concluded that the quantum of notice was not enough.” Such is unauthorized and not within a hearing examiner’s discretion. Since there exists evidence the hearing examiner exceeded his authority, the plea was improperly granted. The court reversed and remanded.*

Tort Claims Act:  City of Houston v. Owens, No. 14-12-00930-CV, 2013 WL 5324015 (Tex. App.—Houston [14th Dist.] Sept. 24, 2013).  This is an interlocutory appeal from the denial of a plea to the jurisdiction in a case where a city police officer had a car accident and struck Plaintiff Owens.  Plaintiff sued both the city and the officer.  This case will be of particular interest to litigators because it deals primarily with Texas Tort Claim Act election of defendants. The trial court dismissed the employee under Texas Civil Practice and Remedies Code Section 101.106(e), which states that if a plaintiff sues both the entity and the employee, the employee is entitled to immediate dismissal.

After the employee was dismissed, the city attempted to get dismissed under Section 101.106(b), which states the filing of suit against an employee bars suit against the entity. The trial court denied the plea and the city appealed.  The Fourteenth Court of Appeals noted that this type of case was addressed in Amadi v. City of Houston, 369 S.W.3d 254, 257–62 (Tex. App.—Houston [14th Dist.] 2011, pet. denied).  Amadi essentially held that the city could not escape liability after it elected to have the employee dismissed under Section 101.106(e).  Instead of analyzing the legal reasoning behind the decision, the court focused on the fact it was bound by the Amadi panel decision and no change in statute or case law supports reconsidering it.

The reasoning in Amadi is arguably flawed since the wording could be used to expand a waiver beyond what the Legislature intended. Instead, one should look to the reasoning in Texas Adjutant General’s Office v. Ngakoue, No. 11-0686, 2013 WL 4608867 (Tex. Aug. 30, 2013), which held that an election under Section 101.106(e) does not trigger subsection (b) because subsections (e) and (f) are concessions the employee is sued in his official capacity only.*

*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