Recent Texas Cases of Interest to Cities

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

Land Use:  City of Lorena v. BMTP Holdings, L.P., No. 11-0554, 2013 WL 4730647 (Tex. Aug. 30, 2013).  “Surely the staunchest cynic of the legislative process would pause to accuse the Legislature of preferring development over, say, sewage in the streets – development run amuck, as it were.”  –Hecht, J., dissenting.  The majority opinion, written by Justice Guzman, held against the city as indicated by the above quote.  The issue in this case was whether, under Chapter 212 of the Local Government Code, a city could place a moratorium on development when the subdivision plat, but not the actual development, has been approved. The city argued that because its sewage system could not handle additional capacity, it needed to enact a moratorium on any future sewer taps or connections, including forbidding BMTP to connect its already approved subdivided plats to the city’s sewage system.  BMTP argued that the language of Chapter 212 forbids such a moratorium against property where the plat has been approved (even if development has not been approved).  The Supreme Court of Texas agreed, holding that once property is approved for subdivision, the property cannot be the subject of a moratorium.  The Court also held that BMTP had provided sufficient evidence of an inverse condemnation claim so that the claim should be reviewed by the trial court.

Governmental Immunity–Tort:  Port of Houston Auth. v. Aaron, No. 01-12-00373-CV, 2013 WL 4760963 (Tex. App.—Houston [1st Dist.] Sept. 5, 2013).   The plaintiffs in this case brought suit against the Port of Houston Authority, a governmental entity, alleging that its operation of the port caused damage to the plaintiffs generally and the Port should compensate their injuries under the Tort Claims Act (Act).  The Tort Claims Act waives governmental immunity for “property damage” and “personal injury” caused by either motor driven equipment or a condition of real property of a governmental entity.  Tex. Civ. Prac. & Rem. Code § 101.021.  The plaintiffs argued that the port caused “unnecessary light, noise, and chemical insults upon their property”, a nuisance claim, that should be covered by the Tort Claims Act.  The port argued that it retained its governmental immunity because these claims were not the kind of “personal injury” or “property damage” envisioned as waiving immunity by the Act.  The court of appeals did not agree with either of these arguments, but held that the port did retain its immunity because these types of injuries were felt by the general public and not “particularized injuries” that would be required by a narrow reading of the Act.

Environmental Regulation:  City of Houston v. BCCA Appeal Group, Inc., No. 01-11-00332-CV, 2013 WL 4680224 (Tex. App.—Houston [1st Dist.], Aug. 29, 2013) (mem. op.).  The issue in this case is whether the City of Houston’s air pollution regulations are preempted by the Texas Clean Air Act (Act) and the Texas Water Code.  The city passed ordinances that: (1) required registration by air polluters; (2) enacted registration fees for these businesses; (3) created penalties for not registering; and (4) adopted, by reference, certain administrative rules related to the Act.  The Act regulates air quality in Texas, but also gives each city the “powers and rights as are otherwise vested by law in the municipality to . . . abate a nuisance; and  . . . enact and enforce an ordinance for the control and abatement of air pollution.”  Tex. Health & Safety Code § 382.113.  BCCA argued that the city’s ordinances related to air quality are preempted by the Act.  The court of appeals held that there was not express or implied preemption of the city’s ordinances because, under the Act, the city had the right to have its own abatement programs and to enforce the Act as it saw fit. The city is able to abate and enforce air quality so long as the city regulation is not inconsistent with the Act or does not prohibit something that the TCAA specifically allows or authorizes.  The court differentiated this case from Southern Crushed Concrete, LLC v. City of Houston, 398 S.W.3d 676 (Tex. 2013), a case that did find preemption under the Act, because the city’s ordinance in that case did make something illegal that was already authorized and permitted by the TCEQ under the Act.  The court also held that the city’s adoption by reference of the ever-changing administrative rules enacted under the Act was not an impermissible delegation of city authority.

Public Information: City of Houston v. Kallinen, No. 01-12-00050-CV, 2013 WL 4602649 (Tex. App.—Houston [1st Dist.] Aug. 29, 2013).  Kallinen requested city documents related to the city’s red light camera system, including information about a study involving the system.  The city provided some of the documents, but withheld others based on allowed exceptions under the Public Information Act (Act).  The city requested a decision from the Attorney General (AG) regarding the documents as required by Section 552.301 of the Government Code.  Before the city received a reply from the AG, the requestor filed suit against the city to have the documents released.  The requestor also asked the AG not to release an opinion due to the court case, and the AG complied.  The issues are whether: (1) a requestor can sue the governmental body before the AG has made a requested ruling; and (2) the AG has to make a ruling regardless of the litigation status of the request.  The court of appeals held that the AG has to make a ruling under Section 552.321 of the Act, regardless of the litigation status of the suit.  The court further held that a trial court only has jurisdiction of a public information claim after the AG has ruled on the matter.  Thus, the requestor had failed to exhaust his administrative remedies before filing suit and the trial court lacked jurisdiction over the case.

Annexation:  Waterway Ranch, LLC v. City of Annetta, No. 02-12-00309-CV, 2013 WL 4473713 (Tex. App.—Fort Worth Aug. 22, 2013).  The annexation issue in this case is whether property can be annexed under Section 43.024 of the Local Government Code if the property is separated from the other annexed area or the city limits by a road.  Section 43.024 allows a general law city to annex property if “a majority of qualified voters of the area vote in favor” or annexation.  Tex. Loc. Gov’t Code § 43.024.  In this case, the landowner in question had not agreed, but other “qualified voters” whose property was separated from the plaintiff landowner’s property by a road, had agreed to the annexation through this process.  The court of appeals held that a road separating the pieces of property did not make the landowner’s property a geographically separate piece of property, and thus it could be annexed under this statute, even without that particular landowner’s consent. This case also raised questions of mootness when a landowner loses ownership of the property during the litigation and ripeness on inverse condemnation claims.

Contractual Immunity:  City of Georgetown v. Lower Colo. River Auth., No. 03-12-00648-CV, 2013 WL 4516110 (Tex. App.—Austin Aug. 23, 2013).  This is an interlocutory appeal from the denial of a plea to the jurisdiction in a case arising out of the City of Georgetown’s long-term contract to purchase electricity from the Lower Colorado River Authority (LCRA).  LCRA sought declaratory relief concerning the parties’ rights and obligations under the contract, and the city filed a plea to the jurisdiction.

The key issues turned on the distinction between a governmental and proprietary function. The Austin Court of Appeals held governmental immunity does not protect the city in this type of case. The court first went through a history of the governmental-proprietary dichotomy. The court noted that before a court considers whether governmental immunity has been waived, the court must determine whether governmental immunity exists in the first place. However, the court expressed some admitted confusion due to Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006), which has language indicating but not expressly holding that the dichotomy applies to torts and not contract disputes. Disagreeing with the San Antonio Court of Appeals case of City of San Antonio v. Wheelabrator Air Pollution Control, Inc., 381 S.W.3d 597, 603–05 (Tex. App.—San Antonio 2012, pet. granted), this court held the statutory changes to a waiver of immunity for contract disputes present in Texas Local Government Code Chapter 271 do not abrogate the common law dichotomy. As a result, providing electrical services is a proprietary function, and the city is not entitled to any governmental immunity.  Since immunity does not exist in the first place, waiver is not relevant. The trial court’s denial of the plea was therefore proper.*

Public Information:  ICON Benefit Adm’rs II, L.P.  v. Abbott, No. 03-11-00459-CV, 2013 WL 4516059 (Tex. App.—Austin Aug. 22, 2013).  In this Public Information Act (PIA) lawsuit several companies sought to prevent the release of an expert “audit report” in the City of Lubbock’s possession.  Appellants (collectively “Parker Group”) filed a temporary injunction to prevent the release of the report which was denied by the trial court, so the Parker Group filed this interlocutory appeal.

From 2004 through 2006, the City of Lubbock contracted with the Parker Group to provide third-party administration of the city’s self-funded health-care plan.  Disputes arose between the Parker Group and the city regarding whether the group satisfied its contractual obligations.  Litigation arose and, as a result of a defamation claim, the city hired an expert to audit the services provided and establish the statements made about non-compliance were true and therefore not defamatory. As part of the report, the Parker Group was ordered, under a protective order, to provide certain sensitive information. The defamation lawsuit was ultimately settled and dismissed but arbitration regarding the contract dispute continued. The arbitrator issued a protective order protecting the audit, but shortly afterwards the city received several PIA requests for the document.  The attorney general (AG) determined the city had to release the audit since it was a completed report and was “super-public.”  The Parker Group obtained an order from the Dallas Court of Appeals noting that the protective order in the defamation lawsuit precluded release. However, while that appeal was pending, the Parker Group initiated this lawsuit against the AG and the city. The Austin Court of Appeals noted that it was not expressing any opinion on whether or not the Dallas Court of Appeals opinion shielded the report from release as the current appeal challenges only the denial of a temporary injunction which is reviewed under an abuse of discretion.  The Parker Group argued the audit report was not “complete” because it omits a detailed finding of claims, did not meet accounting industry standards for an “audit,” and only a report that contains all component parts is a complete report under Section 552.022 of the PIA. The AG and city asserted “completed” means it is finished and brought to an end.  The Third Court of Appeals noted a distinction between “complete” and “completed.” Despite the trial court’s comments on the record that it did not appear to be completed, and the Parker Group’s arguments, the Court of Appeals held it was completed for purposes of Section 552.022.   As a result, it was not error to deny the injunctive relief.*

Tort Claims Act:  City of San Antonio v. Rodriguez, No. 04-13-00116-CV, 2013 WL 4682192 (Tex. App.—San Antonio Aug. 30, 2013) (mem. op.).  This case involves an automobile accident with a police vehicle. The trial court denied the city’s plea to the jurisdiction and the city appealed. The San Antonio Court of Appeals affirmed the denial.

Rodriguez was a passenger in a car that collided with a city police vehicle.  After the initial collision, the driver turned her steering wheel sharply, which caused the vehicle to crash into a retaining wall.  The retaining wall impact killed the driver and seriously injured Rodriguez.  The city asserts the vehicle collision was minor, and there was no evidence regarding which vehicle caused the accident.  Additionally, the bump between the two vehicles was unrelated to the retaining wall impact, which caused the injuries. The Fourth Court of Appeals noted that a “plethora” of evidence existed, which is intertwined with jurisdictional facts and heavily in dispute. The court noted the equal inference rule (it’s just as likely one thing happened than another so no preponderance exists) probably does not apply when ruling on a plea to the jurisdiction since that rule is typical in no-evidence summary judgments. However, even if they were to apply it, the court holds circumstantial evidence of disputes is permissible to establish jurisdiction. The city’s expert’s evidence indicates the bump between the vehicles was likely the fault of Rodriguez’ vehicle.  Following the bump, the driver panicked and overcorrected, which caused the vehicle to crash into the retaining wall.  The court, however, stated that the record is devoid of any reason why Rodriguez’ vehicle would have swerved so soon after the collision.  The court recognized that a reasonable inference is the collision caused the overcorrection. Additionally, since Rodriguez was not successful in an additional suit against Chrysler, she was not judicially estopped from asserting negligence by the city.  The San Antonio Court of Appeals concluded that the trial court properly denied the plea.

Substandard Structures:  Wu v. City of San Antonio, No. 04-10-00836-CV, 2013 WL 4084721 (Tex. App.—San Antonio Aug. 14, 2013) (mem. op.).  This is a dangerous structure/takings opinion out of the San Antonio Court of Appeals.  This opinion withdrew the prior opinion issued on March 6, 2013.

Essentially, in 2005, the city demolished a substandard apartment building owned by Wu after a hearing before City of San Antonio’s Dangerous Structure Determination Board (DSDB). The court of appeals initially instructed the trial court, via interlocutory appeal, that substantial evidence presented at the injunction hearing supported demolition and instructed the trial court to proceed under such a standard.  However, that was before City of Dallas v. Stewart, 361 S.W.3d 562 (Tex. 2012), which held an appeal of a nuisance determination from a structural standards commission must be reviewed de novo.  The city filed a motion for summary judgment asserting substantial evidence supported the DSDB’s demolition order which the trial court granted, and Wu appealed.  The Fourth Court of Appeals held that the summary judgment was granted in error since the trial court reviewed the motion under the substantial evidence review standard.  In this appeal, the city pointed to the injunction hearing evidence and transcript to support that under a de novo review a nuisance existed; however, the court notes the trial court did not have a trial or review de novo, but deferred to the DSDB’s determination and therefore was improper.  In the court’s withdrawn opinion it noted the city failed to raise the argument that evidence supported a nuisance existed under a de novo review, and was precluded from on appeal.  In this corrected opinion, the court does not procedurally preclude the city from making the argument, but holds against the city based on the record.  The court seems to be disregarding the law-of-the-case doctrine which states a court of appeals is ordinarily bound by its initial decision if there is a subsequent appeal in the same case. Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716-17 (Tex. 2003).  The Fourth Court gave direction to the trial court on how to proceed in this case at the interlocutory appeal level.  However, Stewart, can be used to demonstrate that the original holding was clearly erroneous.  The interlocutory appeal was from the denial of an injunction to prevent the demolition.   The good news is that since the city is back in the trial court it can still present evidence for the trial court to review de novo.  The court also noted that even though Wu did not initially bring a takings claim in the trial court, she amended her petition adding it.  According to the court, she need not bring the claim within the same 30 days as the appeal from the DSDB’s order, but must bring it in the same proceeding. As a result, the city’s summary judgment should have been denied, the trial court is to hold a de novo review, and the takings claims are permitted to go forward.*

Zoning:  Bd. of Adjustment of City of Dallas v. Billingsley Family Ltd. P’ship, No. 05-12-00199-CV, 2013 WL 4525832 (Tex. App.—Dallas Aug. 27, 2013).  This is an appeal from a trial court order reversing a ruling of the Board of Adjustment of City of Dallas (BOA). The Fifth District Court of Appeals affirmed the reversal in part and reversed in part, and the BOA appealed.

Billingsley owns multifamily dwellings and was cited by the city for running a residential hotel in violation of the city code.  Billingsley filed a separate lawsuit (and the city counter-claimed) seeking a declaration he was not running a hotel under the statutory definition.  That matter proceeded to trial, which ultimately resulted in the trial court denying relief to all parties.  While Billingsley I was pending, a city building official revoked the dwelling’s certificate of occupancy because the property was deemed a residential hotel and was applied for under false pretense.  Various different actions occurred in Billingsley I at different times including the trial court changing its orders.  The denial of the certificate of occupancy was based on rulings at the time but a chronological flow of events muddied the issues for the trial court on the appeal of the certificate of occupancy denial.  The Fifth Court of Appeals held that it was not error for the trial court to consider the final ruling in Billingsley I for res judicata purposes. Res judicata not only precludes claims that were actually raised but also claims that could have been raised arising out of the same subject matter. Because res judicata precludes re-litigation of the facts (including whether there was a valid certificate of occupancy at the time), such an assertion could not be altered by the building official or the BOA. Therefore, the trial court properly affirmed the reversal of the BOA. However, under the statute authorizing an appeal from a BOA, costs can only be assessed if the court determines the board acted with gross negligence, bad faith, or malice. The court noted the BOA did not have certified copies of the Billingsley I orders before it (even though the court earlier noted that since the BOA did not object to the introduction of the pleadings at trial, it waived an appeal on that basis). As such, no negligence, bad faith, or malice can be established.  The court therefore affirmed the reversal of the BOA but reversed the trial court’s assessment of costs.*

Contractual Immunity:  City of Dallas v. Arredondo, Nos. 05-12-00963-CV, 05-12-00965-CV, 05-12-00966-CV, 05-12-00967-CV, 2013 WL 4076868 (Tex. App.—Dallas Aug. 13, 2013).  Four lawsuits were filed against the City of Dallas by current and former police officers, firefighters, and rescue officers (Officers) alleging that the city breached its contract with them regarding compensation.  The city filed these interlocutory appeals from the trial court’s denial of its pleas to the jurisdiction.

The city enacted an ordinance in 1979, which adopted the pay referendum approved by the city’s voters for Officers with the city.  Following this ordinance, the city raised salaries through annual pay resolutions.  The Officers accused the city of failing to maintain the percentage of pay differential that was required by the ordinance, so these lawsuits were filed by the Officers beginning in 1994.  The Officers alleged that the city breached the contract with the Officers by increasing the pay of higher-ranking officers without making the same percentage adjustments to the pay of lower-ranking officers.  The city argued that the ordinance was a one-time salary adjustment and was not meant to apply to future salary adjustments.

The procedural history in these cases is complicated: the trial court granted summary judgment against the city; the Dallas Court of Appeals concluded the ordinance was ambiguous and remanded the case; the trial court denied the city’s pleas to the jurisdiction and the city appealed; the Dallas Court of Appeals concluded that the city had immunity and reversed the trial court’s ruling but noted that the Texas Legislature passed a new statute waiving immunity from suit for certain breach of contract claims and remanded for the trial court to determine if the Officers’ claims fell within the new statute; the parties filed cross-petitions for reviews, which the Supreme Court of Texas granted; the supreme court concluded the city had governmental immunity, but declined to consider the issue of whether the new statute applied; and on remand, the trial court denied the city’s pleas to the jurisdiction, which precipitated this interlocutory appeal.  The court, using City of Houston v. Williams, 353 S.W.3d 128 (Tex. 2011) as a guide, concluded that the city’s ordinance met the requirements of a contract that satisfies the requirements of the waiver of immunity for breach of contract under the newly enacted Section 271.152 of the Local Government Code.

Takings:  Walton v. City of Midland, No. 11-11-00237-CV, 2013 WL 4654506 (Tex. App.—Eastland Aug. 30, 2013).  Jud Walton sued the City of Midland for a regulatory taking under Article I, Section 17, of the Texas Constitution after the city granted a drilling permit application filed by Endeavor, who owned an oil and gas lease that included Walton’s land.  Walton’s cause of action for inverse condemnation was based on the premise that the city’s granting of the drilling permit constituted a physical invasion of his surface estate.  In addition, because the permit included a provision requiring the drilling of a water well to maintain trees in the area, Walton argued this was an invasion of his groundwater.  The trial court granted the city’s plea to the jurisdiction.

On appeal, Walton argued that the water well requirement in the permit, as well as the granting of the drilling permit in general, constituted a permanent physical invasion under the analysis in Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982).  The court held that the water well provision did not require Walton to suffer a permanent physical invasion of his property because it did not require Endeavor to drill the water well on Walton’s property.  The water well could have been drilled on someone else’s property and still have complied with the permit’s requirement.  Further, the granting of the drilling permit did not compel Walton to suffer a permanent physical invasion because the permit itself did not grant any affirmative rights to Endeavor to occupy or use Walton’s property.

The court also held that Walton did not have a viable claim that the granting of the permit completely deprived Walton of all economically beneficial use of his property under Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019 (1992).  The evidence showed that Walton’s property had a value of at least $3,000 per acre after Endeavor drilled the well, so he was not deprived of all economically beneficial use of the property.  The court affirmed the judgment of the trial court.

Forfeiture:  Wolf v. City of Mission, No. 13-12-00737-CV (Tex. App.—Corpus Christi Aug. 29, 2013).  This is a plea to the jurisdiction case arising out of a forfeiture proceeding. The Hidalgo County District Attorney’s office filed a notice of seizure for seven parcels of real property. In the 2007 forfeiture proceeding, the trial court entered an order for four of the seven parcels to be forfeited and three to be returned to the owner. Wolf filed a plea in intervention in 2011 asserting he had judgment liens against the properties and seeking to void the 2007 judgment. The city filed a plea to the jurisdiction asserting Wolf lacked standing, the city had immunity, and the court lost plenary power 30 days after judgment. The trial court granted the plea and Wolf appealed.

Wolf countered the plea at the trial court level and appeal arguing the trial court did not lose plenary power 30 days after the judgment because his dispute deals with the enforcement of  a judgment over which a court always has power. However, the plenary power argument is only one of three challenges to jurisdiction raised by the county. Without hardly any explanation, the court held that “if an independent ground fully supports the complained-of ruling or judgment, but the appellant assigns no error to that independent ground, then … we must accept the validity of that unchallenged independent ground….”  In other words, since Wolf didn’t address two of the reasons for the plea, the court does not have to analyze whether any of the reasons are correct, it must just accept those two reasons as valid; Wolf waived any challenge to them.*

Trial Procedure:  Theatre Council Prods., Ltd. v. City of Harlingen, No. 13-12-00167-CV, 2013 WL 4506580 (Tex. App.—Corpus Christi Aug. 22, 2013) (mem. op.).  This is a commercial dispute between the City of Harlingen and Theater Council Productions (TCP).   The city sued TCP after several Broadway musicals did not go on as planned at the Harlingen Municipal Auditorium.   The city sued TCP for breach of fiduciary duty, breach of contract, and conversion.  TCP answered. The city requested a non-jury trial in a pre-trial order. TCP objected to removing the case from the jury docket.  The court proceeded with a bench trial and TCP announced ready the day of trial. The trial court ruled in favor of the city and ordered TCP to pay $58,996.88, plus post-judgment interest and court costs, as well as attorney’s fees. TCP appealed, arguing it relied upon Harlingen’s jury demand contained within its pleadings and the city’s payment of the jury fee and it did not waive the ability to object on appeal.

Under Texas Rule of Civil Procedure 220 an opposing party may rely on another party’s jury demand, when a demand is made and a fee is paid. It is an abuse of discretion to remove the case from the jury docket over objections. In this case, the city requested a jury and paid a fee, but the trial court removed it from the jury docket 18 days before trial and did not give TCP reasonable time under Rule 216 to request its own jury setting. Additionally, the Thirteenth Court of Appeals held the error was definitely harmful since several fact questions were presented to the trier of fact (judge) which were directly linked to the success of the various causes of action.  The court reversed and remanded for a full jury trial.*

Torts:  Kilburn v. Fort Bend Cnty. Drainage Dist., No. 14-13-00011-CV, 2013 WL 4070979 (Tex. App.—Houston [14th Dist.] Aug. 13, 2013). In this Texas Tort Claims Act case the main issue is whether the plaintiffs plead an actual negligence claim or are attempting to mask their trespass claim.  The Fourteenth Court of Appeals held a proper negligence claim was alleged.

The Kilburns own a ten-acre tract of land adjacent to a creek in Fort Bend County in which the county excavated to remove debris and grade its banks. It is uncontested that the county erroneously believed it had an easement which would have allowed the work. By the time the error in the records was discovered the work was substantially complete. The Kilburns originally sued the county alleging trespass, but later dismissed and alleged the negligent operation or use of motor driven equipment damaged their property.  The county filed a plea to the jurisdiction alleging the negligence claim was simply a recast of the trespass claim for which it has immunity.  The trial court granted the city’s plea and the Kilburns appealed.

The appellate court held that even though the Kilburns did not allege the equipment was negligently used and focused on the negligence in not confirming the easement, it was still a negligence claim.  It focused on the argument that the difference centers on whether an “intent” to harm is present, and since there was no intent to harm, it must be negligence. The court held the county failed to raise the jurisdictional challenge that the negligent use of information is not a waiver at the trial court level and therefore disregarded the argument on appeal.  The court did state in a footnote that it believed the negligent use of information argument would still fail because the cases holding the failure to use information came under recasting of negligent use of tangible personal property, not motor-driven equipment, so were not applicable. As a result, the Kilburns properly alleged a negligence (not trespass) claim and the order granting the plea to the jurisdiction is reversed.*

*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