Recent Texas Cases of Interest to Cities

Note: Included cases are from January 11, 2015 through February 10, 2015.

Governmental Immunity-Tort: Ryder Integrated Logistics, Inc. v. Fayette Cnty., No. 13-0968, 2015 WL 496303 (Tex. Feb. 6, 2015) (per curiam). The issue in this case is the interpretation of the phrase “arises from the operation or use” of a motor vehicle under the Tort Claims Act, Section 101.0121 of the Texas Civil Practices and Remedies Code. In this case, a county law enforcement officer was repositioning his car on the side of the road during a traffic stop of Molina, with his headlights and high beams pointed into oncoming traffic, when an accident occurred. A Ryder truck hit Molina’s truck which was still parked on the side of the road. The accident killed the Ryder truck driver and caused damages to Molina. Molina sued Ryder. Ryder sued the county, alleging that the accident was caused by the county’s negligent use of a motor vehicle. The county filed a plea to the jurisdiction arguing that it was immune because the county officer’s operation of the vehicle did not cause the accident, but simply furnished a condition. The court of appeals held that the county retained immunity, and Ryder appealed. The Supreme Court held that Ryder had alleged sufficient facts that the county officer was operating the county vehicle and that his operation of the county vehicle did more than furnish a condition for the accident. The Supreme Court remanded the case to the trial court to be heard on the merits.

Substandard Buildings: Whallon v. City of Houston, No. 01-11-00333-CV, 2015 WL 505429 (Tex. App.—Houston [1st Dist.] Feb. 5, 2015). The City of Houston demolished a condominium complex that had many issues and then sued multiple owners for the cost of demolition and attorney’s fees. Three of these defendant property owners were Whallon, Garcia, and Grayshaw. The trial court entered judgment against Whallon, but not Garcia and Grayshaw because they were on the list of property owners who were settling with the city. However, one month after the trial court’s judgment, the city asked the court to modify the judgment to add Garcia and Grayshaw. The court modified the judgment to include Garcia and Grayshaw’s pro rata share of the demolition costs. The issues are whether the trial court: (1) had jurisdiction over Garcia and Grayshaw at the time of the corrected final judgment; and (2) made multiple mistakes related to the judgment against Whallon. The court of appeals first looked at the issue of res judicata in relation to the suits of all three defendants.   The argument is that the city should have sought demolition fees in front of the building and standards commission, but did not do so, and thus its case was barred by res judicata. The court of appeals held that the cases were not barred by res judicata because any suit before the commission or the district court was not mutually exclusive. Next, the court of appeals reviewed whether the trial court had jurisdiction over Garcia and Grayshaw at the time of the corrected final judgment. The court of appeals reversed the judgments against Garcia and Grayshaw because there was sufficient evidence that there were settlement agreements with these defendants under Rule 11. The court of appeals reviewed Whallon’s case to determine whether the demolition costs and attorneys’ fees were appropriate. The court of appeals first held that Chapter 214 of the Local Government Code authorizes an award of attorneys’ fees for the city. The court of appeals also reviewed the amount of the attorneys’ fees. It held that the evidence supported the trial court’s awards of attorneys’ fees to the city for Whallon’s case.

Pension Audit: Board of Trustees of Houston Firefighters’ Relief & Retirement Fund v. City of Houston, No. 01-12-01167-CV, 2015 WL 464232 (Tex. App.—Houston [1st Dist.] Jan. 27, 2015). The issue in this case was when and how a city may request information related to an audit of its public pension. The City of Houston sued the retirement fund to force it to give the city all information related to an extensive, “replication-level” audit. Section 802.1012 of the Government Code requires that every five years the city audit its pension funds separately from the fund’s own audits. Chapter 802 also requires that the city enter into an agreement with the auditor regarding the confidentiality of the fund’s information. The city did an audit in 2008, but asked again to do the audit in 2011, requesting all actuarial and other information from the fund. The question is what duty the fund’s auditors have to release information to the city. The court of appeals held that the fund had some discretion to decide what information to release to the city and was not required to release information sufficient to do the “replication-level audit” that the city wished to conduct. The court of appeals rendered judgment in favor of the fund.

Billboards: Garrett Operators, Inc. v. City of Houston, No. 01-13-00767-CV, 2015 WL 293305 (Tex. App.—Houston [1st Dist.] Jan. 22, 2015).  This is a procedural vested rights case. The city argued that the billboard company, Garrett Operators, filed their suit outside the statute of limitations and that no tolling applied to their case. The court of appeals held that the suit was timely filed under the tolling statutes because their prior case had been dismissed for lack of jurisdiction and there were no other impediments to using the tolling provisions. The primary issue was whether the city’s sign code required a person converting a regular billboard to an LED billboard needed a permit based on a provision that required a permit to “erect, reconstruct, alter, relocate or use a sign” but not if the change was just for “electrical wiring or devices.” The court of appeals held that changing a billboard to an LED board was more than just changing the wiring and was more of a reconstruction requiring a permit. The court of appeals also noted that an interpretation of the sign code that would allow such a change to be made without a permit would swallow the entire sign code and its requirements for permits. Because the sign owner did not apply for a permit (as required when reconstructing a sign), he had not vested his rights under Section 245.002 and his construction of an LED sign could be barred by a later sign code amendment adopted before he filed for his permit.

Employment Discrimination: Anderson v. Houston Cmty. Coll., No. 01-14-00062-CV, 2015 WL 174233 (Tex. App.—Houston [1st Dist.] Jan. 13, 2015). Ms. Anderson sued the Houston Community College and her supervisor, Dr. Bradford, for discrimination, hostile work environment, and retaliation under the Texas Commission on Human Rights Act (TCHRA), Chapter 21 of the Labor Code. The trial court dismissed Ms. Anderson’s claims and awarded Dr. Bradford’s attorney’s fees to be paid by Ms. Anderson.   Anderson appealed arguing that she alleged enough facts to allow her claims to go forward and that she should not be required to pay Dr. Bradford’s attorney’s fees because Bradford should not be held to be a prevailing party. The court of appeals affirmed the trial court’s order because the plaintiff: (1) failed to raise fact issues on her race and gender discrimination claims; (2) failed to raise fact issues that harassment was pervasive and severe enough to cause a hostile work environment; and (3) because she presented no evidence of an adverse employment action caused by protected activity, which is an essential part of a retaliation claim. The court further held that Ms. Anderson’s supervisor, Dr. Bradford, could not be held individually liable under the TCHRA because she does not fit the definition of employer. The court affirmed the trial court’s order for the plaintiff to pay Dr. Bradford’s attorney’s fees because the TCHRA and prior cases allow attorney’s fees to be awarded to a defendant if the suit is “frivolous, meritless, and unreasonable.” The court of appeals noted that the fact that an individual cannot be liable under the TCHRA is well established; therefore, the plaintiff’s suit against Dr. Bradford was “frivolous, meritless, and unreasonable.”

Condemnation: Whittington v. City of Austin, No. 03-13-00410-CV, 2015 WL 524322 (Tex. App.―Austin Jan. 29, 2015). The City of Austin could not agree on a price for property owned by the Whittingtons that the city desired to use for the construction of a downtown convention center and cooling plant, so the city filed a condemnation suit. Extensive litigation and multiple appeals resulted from this condemnation. However, the Austin Court of Appeals looked at a single issue: the interest awards ordered by the district court. The Whittingtons argued that they were entitled to the interest earned on funds the city deposited during the 10-plus years that the money remained in the court registry during the time the Whittingtons and the City of Austin were litigating the condemnation. The city, though, contends that the final judgment in 2013 should be the starting point for determining interest rates and that the Whittingtons were not entitled to an interest award between the 2007 and 2013 judgments in the case.

The Austin Court of Appeals concluded that the decision to challenge the propriety of a taking does not waive a property owner’s constitutional entitlement to compensation if the taking is deemed proper. Similarly, the court stated that challenging a condemnor’s authority to take property does not waive a property owner’s right to recover otherwise permissible interest awards. The court noted that the city’s punitive interpretation would reverse the equities involved in this case. By electing to condemn and assume possession of the property before the condemnation proceeding became final, the city ran the risk that the Whittingtons might challenge its ability to condemn the property, and thus, the city would owe interest on any compensation awarded that exceeded the amount of the initial deposit. The Austin Court of Appeals reversed the portion of the district court’s judgment awarding the accrued investment interest to the city and remanded the case for further proceedings.

Public Information Act: Tyler v. Paxton, No. 03-12-00747-CV, 2015 WL 410281 (Tex. App.―Austin Jan. 28, 2015) (mem op.). This is a Public Information Act (PIA) case where the Victoria County District Attorney (DA or Tyler) attempted to exempt documents from disclosure. The Austin Court of Appeals remanded the case for consideration of the compelling nature of the attorney/client privilege in relation to the documents. Tyler’s office received a request under the PIA for information relating to services rendered to the DA’s office by specific attorneys. Tyler’s office asserts it mailed a request to the Office of the Texas Attorney General (AG) for an opinion regarding whether certain information is protected by the attorney/client privilege and work product but for “reasons unknown” the postmark was after the ten-day deadline to mail in a request.

The AG’s opinion letter agreed the attorney/client privilege applied but since Tyler’s office did not mail the letter timely, it waived the privilege. The AG did not consider the waiver a compelling reason to except the documents from disclosure. Tyler sued the AG under the PIA. Both sides submitted opposing summary judgments. The trial court denied Tyler’s motion and granted the AG’s motion. Tyler appealed. The court first analyzed Tyler’s request for an implied “good faith” defense for the failure to comply with the deadline requirements and that such is not a knowing waiver of the privilege. The court held the plain language of the PIA does not include a good faith defense for failing to timely mail and they declined to imply one. As to the nature of the attorney/client privilege and whether it and the work product privilege are compelling reasons to withhold information despite the missed deadline, Tyler did not raise those issues in his summary judgment motion. However, the court went on to say that “[t]he DA’s failure to affirmatively demonstrate a compelling reason . . . does not necessarily establish that the trial court was correct in granting the AG’s motion for summary judgment.” The AG failed to establish in its motion that the reason was not compelling or could not be compelling. Citing to the court’s recent holding in Abbott v. City of Dallas, No. 03-13-00686-CV, 2014 WL 7466736 (Tex. App.—Austin Dec. 23, 2014, no pet. h.), the court held the attorney/client privilege could qualify as a compelling reason to withhold the information even if the deadline is missed. As a result, the court held neither party is entitled to summary judgment and remanded the case to consider the issue of the compelling nature of the information.*

Breach of Contract: City of Eagle Pass v. Salazar, No. 04-14-00309-CV, 2015 WL 179283 (Tex. App.―San Antonio Jan. 14, 2015) (mem. op.). The City of Eagle Pass appealed the trial court’s grant of summary judgment to Irma Leticia Salazar based on the city’s breach of a mediated settlement agreement (MSA) between the parties. Salazar sued the City of Eagle Pass for injuries that she sustained in an automobile accident, and the city entered into a MSA. The MSA required the city to pay Salazar a certain sum of money if she underwent surgery within one year. Two weeks after the MSA was signed, the city presented Salazar with a “Settlement Agreement and Release” that added a stipulation to the payment of the sum of money. Salazar refused to sign the new agreement. Salazar underwent a back surgery, and the city refused to pay the money owed under the MSA. Salazar sued the City of Eagle Pass for breach of contract. The San Antonio Court of Appeals concluded that the MSA was unambiguous on its face and affirmed the trial court’s grant of summary judgment for Salazar.

Contractual Immunity: South E. Tex. Reg’l Planning Comm’n v. Byrdson Servs., L.L.C, No. 09-14-00198-CV, 2015 WL 269053 (Tex. App.—Beaumont Jan. 22, 2015). This is an interlocutory appeal from the denial of a plea to the jurisdiction in which the Beaumont Court of Appeals reversed the denial and dismissed the South East Texas Regional Planning Commission (Commission). As a result of Hurricane Ike, the Commission used federal funds for home repairs. Byrdson sued the Commission alleging it failed to pay for some work completed and refused to allow other work to proceed. The Commission filed a plea to the jurisdiction which the trial court denied. The Commissioned appealed.

The appellate court first analyzed the changes to Chapter 271 of the Texas Local Government Code which waives immunity for breach of contracts in certain circumstances. The Commission notes the contracts expressly state it is a “contract administrator” but not a party to the contract. However, the nature of the contract benefits the Commission, Byrdson, and the various home owners. The contract also gave the Commission the power to terminate. The Commission was, therefore, a party to the contract. However, under the contracts, private homes damaged were to be repaired using public money from a limited public fund. The various contracts subjected the contractors to oversight by the governmental entity that was tasked with disbursing the funds for the repairs. The Commission was not obligated to complete the repairs if Byrdson defaulted and it was the homeowner who was solely responsible for ensuring performance. As a result, the goods and services were provided to the homeowner, not the Commission. The fact that the Commission received a warranty and indemnity provision was irrelevant as that was not the basis of the suit and was merely common language to protect the fund administrator (i.e. the conduit of federal funds) from liability attributable to Byrdson. Importantly, the court held “Chapter 271 does not include express language waiving immunity for the contingent claims, such as future warranty and indemnity claims that might be made, when such claims do not form the basis of the claims on which Byrdson sued.” As a result, the Commission maintains its immunity from suit.*

Recall Election: In re Johnson, No. 10-14-00341-CV, 2015 WL 505220 (Tex. App.—Waco Feb. 2, 2015) (mem. op.). In this case, relators (a former mayor and three sitting councilmembers) sought a writ of mandamus directing the City of Hearne City Council to order a recall election of Councilmember Vaughn. The county elections administrator certified that the city had received a petition with a sufficient number of qualified signatures to trigger a recall election under the city charter.  Respondents (the current mayor, a sitting councilmember, Vaughn, and the city secretary) argued the city council had no ministerial duty to schedule the recall election before the next uniform election date (May 2015) because there was a pending declaratory-judgment counterclaim in district court challenging the allegations against Vaughn. The Waco Court of Appeals held that the counterclaim had no bearing on the city council’s ministerial duty under the city charter to order the recall election. Moreover, the court held that because the recall election should have been held on November 4, 2014 (but didn’t because a majority of the council failed to vote in favor of ordering the election) the election shall be held within thirty-five days of the date of the opinion.

Regulatory Taking: City of Galveston v. Murphy, No. 14-14-00222-CV, 2015 WL 167178 (Tex. App.—Houston [14th Dist.] Jan. 13, 2015). Following Hurricane Ike, the City of Galveston informed Joe Murphy and Yoram Ben-Amram (property owners) that, because their multi-family dwellings had been unoccupied for over six months, their properties had lost grandfathered non-conforming status and would require a specific use permit (SUP) to be occupied as multi-family dwellings. Property owners submitted a SUP application to the city, and city staff recommended approval, subject to meeting specified conditions, including meeting all compliance requirements necessary to lift the condemnation, and providing more parking spaces or requesting a variance. The city council ultimately denied the SUP request. The property owners sued the city, arguing that the city unconstitutionally took their property without just compensation through inverse condemnation. The city filed a motion to dismiss for lack of subject matter jurisdiction on the grounds that the claims were not ripe because there was no final or definitive decision regarding use of the property as multi-family dwellings. The trial court denied the city’s motion to dismiss, and the city appealed.

On appeal, the city argued that the property owners’ claims were not ripe because they never obtained a final decision regarding their use of the property as an apartment complex, since the denial of the SUP application was based on code safety and structural concerns with the property. In other words, the decision was not final because the city encouraged the property owners to bring the property within compliance and reapply. The court of appeals relied on the decision in Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998) to conclude that the property owners’ regulatory takings claims with regard to the city’s denial of the SUP application were not ripe, as the property owners did not obtain a final decision since the city was open to reapplication. However, the court of appeals also concluded that the city did not meet its burden to establish that its decision to revoke the property’s grandfathered nonconforming status was not final and authoritative. All of the evidence in the record as to ripeness was focused on the lack of an SUP reapplication and not a failure to obtain a final decision on the city’s removal of the property’s grandfathered nonconforming status.

The court of appeals affirmed in part the trial court’s denial of the city’s plea to the jurisdiction regarding the takings claims based on the revocation of the property’s grandfathered nonconforming status, and reversed in part the trial court’s denial of the city’s plea to the jurisdiction regarding the takings claims based on the denial of the SUP application.

*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