Recent Texas Cases of Interest to Cities

Note:  Included cases are from August 11, 2015 through September 10, 2015.

Referendum:  In re Williams, No. 15-0581, 2015 WL 4931372 (Tex. Aug. 19, 2015) (per curiam).  This is a case based on the equal rights ordinance referendum petition by the citizens of the City of Houston.  The court in this mandamus proceeding held that the city has to word the election proposition so that the voters can vote directly for or against the proposition.  See also In re Woodfill, No. 14-0667, 2015 WL 4498229 (Tex. July 24, 2015), summarized in the August 2015 TCAA newsletter.

Annexation:  City of Richmond v. Pecan Grove Mun. Util. Dist., No. 01-14-00932-CV, 2015 WL 4966879 (Tex. App.—Houston [1st Dist.] Aug. 20, 2015) (mem. op.).  This is an interlocutory appeal from the plea to the jurisdiction involving the city’s annexation of a property noncontiguous with its border.  In order to annex the noncontiguous property, the city first annexed a narrow intervening strip of land owned by the Texas Department of Transportation.  The Pecan Grove Municipal Utility District sought a declaration that the annexation of both the strip and the property are void because the intervening strip was statutorily too narrow to be annexed without a petition of annexation from the landowner.  The city filed a plea to the jurisdiction which was denied.

The sole issue before the appellate court is whether the utility district has standing to challenge the annexation.  The utility district alleged that it was harmed as a potential service provider to the annexed area.  It also argued that there was an agreement between the city and the district to share sales tax revenue in the city’s extraterritorial jurisdiction bordering the district, and the annexation would decrease the revenue received by the district.  Finally, the annexation would change the location of the city’s extraterritorial jurisdiction, and the district was required to obtain city approval for projects within that extraterritorial jurisdiction.

The court found that the city conclusively established that the utility district does not have the capacity to service the annexed area and that the agreement between the city and the district did not include the annexed property.  Also, the court held that the change in the location of the city’s extraterritorial jurisdiction was a burden on the public in general, not a special burden on the utility district.  The court resolved the issue of standing by holding that the utility district has not a suffered a particular burden or injury from the city’s annexation.

Personnel:  Staff v. Colorado Cnty., No. 01-14-00323-CV, 2015 WL 4930546 (Tex. App.—Houston [1st Dist.] Aug. 18, 2015).  This case involves a peace officer who was terminated based on a written notice from his supervisor.  The issue is whether: (1) Chapter 614 of the Government Code applies to the termination of a peace officer based on the supervisor’s judgment; or (2) a written disciplinary notice signed by a supervisor is sufficient under Chapter 614 of the Government Code.  Chapter 614 of the Government Code requires that any complaint against a peace officer: (1) be in writing and signed; and (2) be given to the officer.  The court of appeals held that Chapter 614 does not restrain the authority of a county to fire an individual, but that it does require the county to follow a certain procedure.  Thus, Chapter 614 applies to at-will employees.  The court also held that when a complaint originates outside the law enforcement agency, then the victim or complainant must complete a written and signed complaint under the Chapter, and a notice by the agency head is not enough.  A written notice by an agency head or supervisor is only sufficient under Chapter 614 if the complaint originates within the department.  In this case, the court of appeals found that a written notice by the supervisor was insufficient under Chapter 614, even though the complaints of the outside source had been verified by the supervisor viewing a recording of the complained-of activity.

Personnel Arbitration:  City of Arlington v. Kovacs, No. 02-14-00281-CV, 2015 WL 4776100 (Tex. App.—Fort Worth Aug. 13, 2015).  This case involves whether an arbitrator exceeded his authority when reviewing post-termination evidence in contravention of the city’s personnel policies in the firing of Kovacs.  Kovacs was placed on administrative leave and then fired for sexually assaulting someone he had  picked up for driving erratically, sexually assaulting his girlfriend, physically assaulting his girlfriend, and for retaliatory comments he made about other officers involved in his criminal arrests.  The personnel policies he violated that lead to his termination were: (1) unbecoming conduct for the assault and family violence and for the retaliation charges; (2) failure to conform to laws for his family violence arrest; and (3) lack of judgment for allowing an individual who was suspected of driving under the influence to ride in the front seat of his car and then sexually assaulting her.  After the termination, Kovacs was no billed on all of the charges against him.  Kovacs appealed his termination to an arbitrator.  The arbitrator used the no bills in the criminal charges in his decision to order Kovac’s reinstatement, and referenced the no bills in his written statement.  The court of appeals emphasized in its opinion the strong favor given to arbitration decisions, but held that the arbitrator did exceed his authority when he used the evidence of the no bills in his decision to reinstate Kovacs.  The city’s personnel manual limited the arbitrator’s authority to determining whether the employee violated the personnel rules, as charged.

Tort Claims Act: City of Bastrop v. Bryant, No. 03–14–00591–CV, 2015 WL 5097250 (Tex. App.―Austin Aug. 27, 2015) (mem. op.).   This is an interlocutory appeal in a Recreational Use case where the city appealed the denial of a plea to the jurisdiction. The Austin Court of Appeals reversed the denial and rendered a dismissal.  While on an outing with her younger siblings in the City of Bastrop’s Fisherman’s Park, Bryant, then nineteen years of age, was injured on a swing when the chain broke throwing her to the ground. She sued the city alleging a premise defect – specifically the injuries were the foreseeable result of an “extremely hazardous” and “dangerous” condition created by the city’s failure to perform “adequate” or “proper” inspections and maintenance on the swing set.  The city filed a plea to the jurisdiction with evidence, which the trial court denied and the city appealed.

The court noted the Recreational Use Statute applies and Bryant’s pleadings mainly focus on the constructive knowledge of the city, not the actual knowledge required to waive immunity. However, she presented evidence the swing set was inspected the day of the accident and argued a fact question exists as to whether the city had actual knowledge of the defect. However, an inspection alone does not establish evidence of actual knowledge. The city produced evidence from the foreman noting the exact procedures followed for inspections as well as the inspection report performed. The report noted no evidence of a defect was observed. The city also attached inspection reports for several city parks dating years back. The court noted the foreman listed on these reports when inspections revealed defects and that repairs were performed. Such evidence indicates knowledge that the swings would periodically require repair and that repairs were performed, but nothing more. The court seemed to believe it important the city showed a consistent record of inspections, documentation of observable problems and repairs. No evidence existed the swing on the day in question was observably defective. Further, the fact the playground did not have a soft-fiber base to cushion falls was considered “ . . . the sort of open and obvious risks for which the City would not owe a duty . . . . “  As a result, the city negated an essential jurisdictional element and the plea should have been granted.*

Contractual Governmental Immunity: Canario’s, Inc. v. City of Austin, No. 03–14–00455–CV, 2015 WL 5096650 (Tex. App.―Austin Aug. 26, 2015) (mem. op.).  Canario’s, as developer of a project to construct a nightclub, deposited with the city over $100,000 to be held as fiscal security to ensure proper completion of the project under a city regulation. The escrow agreement provided that the funds and accrued interest would be released to Canario’s upon the city’s acceptance of the improvements. The city later received a letter from Canario’s president requesting release of the funds, but to Ms. Flores and Mr. Cornejo his “local partners.”  Based on the letter, the city released the funds. Caranario’s, Inc. later informed the city that Flores and Cornejo were not authorized to receive the funds. Canario’s sued the city for breach of fiduciary duty, breach of contract, and negligence, alleging that in releasing the funds, the city had violated its policies and its duty to verify the identity of a payee. The city responded with a plea to the jurisdiction which the trial court granted and Canario’s appealed. Consistent with its side of a split amongst the court of appeals, the Austin Court of Appeals holds to the position the proprietary-governmental dichotomy exists in the contract context. The court held in determining whether an act is proprietary or governmental falls on the specific acts underlying the claim – the city’s decision to accept and hold escrow deposits and its handling of the return of such deposits.  The city’s collecting, holding, and distributing escrow funds are functions that could easily be handled by a private entity and are discretionary and not essential to or even usually associated with a city’s planning or zoning functions.  As a result, such acts are proprietary and no immunity is implicated. The plea was therefore improperly granted.*

Environmental Permitting:  Kunze v. Texas Comm’n on Envtl. Quality, No. 03–13–00851–CV, 2015 WL 4908478 (Tex. App.―Austin Aug. 14, 2015) (mem. op.).  The City of LaCoste filed an application to review its wastewater discharge permit with the Texas Commission on Environmental Quality (TCEQ). After the application was declared administratively complete, notice was published in the local newspaper, as required by statute. The TCEQ executive director made a preliminary decision to approve the renewal and notice of this was again published in the city’s local paper. Two months later, the executive director renewed the permit. One month after that, Harvey Kunze filed a petition for judicial review. TCEQ and the city filed separate pleas to the jurisdiction both asserting that Kunze was not owed personal notification of the renewal application proceeding and that Kunze had not exhausted any administrative remedies and thus was barred from seeking judicial review. The trial court granted the pleas.

Kunze appealed this decision arguing that he was entitled to notice of the permitting procedure. The court acknowledges that notice of a permit application generally must be mailed to nearby landowners. However, when the applicant seeks only to renew its wastewater discharge permit, notice of that application to renew is not required to be mailed to adjacent and downstream landowners. The court stated that the proper notice was published in the newspaper and held that Kunze did not demonstrate that he was entitled to more notice than was provided.

The court pointed out that both the Texas Water Code and the TCEQ’s rules provide administrative remedies for parties who object to an action taken by the executive director. It is well-settled law that “only a party that has exhausted all available administrative remedies may seek judicial review.” Texas Water Comm’n v. Dellana, 849 S.W.2d 808, 809-810 (Tex. 1993). Kunze argued that he was only required to file a petition for judicial review within thirty days of the date the executive director issued the permit. Additionally, he asserted that TCEQ would not have been able to act on a motion to overturn, for reconsideration, or for a contested case hearing before the thirty day deadline meaning the exhaustion requirement was nonsensical. The court states that the fact that the administrative penalties are unlikely to have been finalized by the time a party must file a petition for judicial review does not excuse the individual from availing him or herself of those remedies. Because there were administrative remedies available, Kunze was required to exhaust those. Since he did not do so, he is barred from seeking judicial review. The court affirmed the trial court’s order.

Whistleblower Act:  City of Bertram v. Reinhardt, No. 03-14-00296-CV, 2015 WL 4899946 (Tex. App.—Austin Aug. 12, 2015) (mem. op.).  The issue in this case is whether the city can raise for the first time on appeal that an employee failed to initiate a grievance procedure as required by the Whistleblower Act prior to filing suit.  Reinhardt, a former employee, sued the city for a claim under the Whistleblower Act.  At the trial court, the city raised issues related to Reinhardt’s allegations but did not raise the issue of failure to initiate the grievance procedures.  The district court allowed the case to go forward.  At the appellate court level, the city raised the claim of failure to initiate the grievance procedure.  The court of appeals held that it could look at that issue because it was a jurisdictional prerequisite under the Whistleblower Act.   The court of appeals cited Rusk State Hospital v. Black for the proposition that a court can consider any jurisdictional arguments, even if the arguments were not raised in the trial court.  392 S.W.3d 88, 94-97 (Tex. 2012).  The court of appeals held that the jurisdictional argument was valid, and then remanded the case to the court of appeals to allow Reinhardt to replead to fix the jurisdictional problem.

Tort Claims Act:  City of Dalhart v. Lathem, No. 07-14-00229-CV, 2015 WL 5230443 (Tex. App.—Amarillo Aug. 31, 2015). This is a general negligence and premise liability case where a minor child was injured by falling boards at a public pool. The Amarillo Court of Appeals reversed the denial of the city’s plea to the jurisdiction and rendered judgment for the city. Carol Lathem’s eight-year-old daughter paid to swim at the city pool. Lifeguards announced a fifteen-minute break and required all swimmers to leave the pool. Six years prior, the city had purchased prefabricated lockers in boxes which city employees later assembled.  Unsure what to do with several six-foot-long board leftovers, the workers placed them on top of the lockers where they sat for many years. When the Lathem child leaned against the lockers the boards fell striking and injuring her legs. The mother sued the city which filed a plea to the jurisdiction. The plea was denied and the city appealed.

The court first noted under the Recreational Use Statute, the city is only liable for gross negligence for the premise defect claim.  And while Lathem was not swimming at the time of the injury, she left the pool only because of the lifeguard’s direction to all swimmers.  She was injured at a picnic table on the pool property and therefore she was engaged in a recreational activity. As to the claim of gross negligence, the boards stayed on top the lockers for six years without incident. Grossly negligent conduct must impose an objectively higher risk than ordinary negligence and nothing indicates the city’s actions rose to that level. There is a difference between “not very safe” and a risk so great as to make it highly probable that harm would follow. The premise defect claims were dismissed. As to the “use” of tangible personal property, the boards sat for six years without moving.  There is no evidence the city “used” them by putting them into action or service.  If anything they were left aside “unused” for years. As a result, there is no waiver under the Texas Tort Claims Act. The court reversed the denial and rendered judgment for the city.*

Tort Claims Act:  City of Socorro v. Hernandez, No. 08-14-00009-CV, 2015 WL 5158446 (Tex. App.—El Paso Sept. 2, 2015).   Hernandez and Maldonado were in a car crash that rendered their car inoperable.  In responding to the crash, a city police officer parked his patrol car on a side street and ordered Hernandez and Maldonado to push the stalled vehicle out of the road.  Another driver, who was distracted by the officer’s flashing lights, hit Hernandez, Maldonado, and the police officer while the vehicle was being pushed.  Hernandez and Maldonado sued, claiming their injuries and damages were caused by the city’s negligent conduct.  The city filed a plea to the jurisdiction, which the trial court denied.  The city appealed the denial, raising three issues:  (1) whether the allegations establish that the injuries were proximately caused by the city’s “use” of its police car; (2) whether the injuries were proximately caused by the city’s use of Hernandez’s disabled car; and (3) whether the pleadings establish that the dangerous condition created by Hernandez’s disabled car was a special defect.

The court concluded that the officer did “use” the vehicle when he activated the overhead flashing lights and that the flashing lights did not merely furnish the condition that made the plaintiffs injuries possible.  Accordingly, the court overruled issue one.  The court also overruled issue two, concluding that plaintiffs sufficiently alleged that the officer “used” or “operated” a motor-driven vehicle, which led directly to the injuries.  As to issue three, the court concluded as a matter of law that Hernandez’s disabled vehicle was not a special defect within the meaning of the Torts Claims Act.

Economic Development:  City of Dallas v. City of Corsicana, Nos. 10-14-00090-CV, 10-14-00171-CV, 2015 WL 4985935 (Tex. App.—Waco Aug. 20, 2015) (mem. op.). This is a case involving pre-suit discovery and immunity under Texas Rule of Civil Procedure 202.  The City of Corsicana, Navarro College, and Navarro County (collectively referred to as Navarro) sued the City of Dallas alleging it lured a Home Depot away causing it to breach a tax abatement agreement with the Navarro entities. Essentially, the City of Dallas convinced Home Depot to close its warehouse in Corsicana and open a new one in the City of Dallas city limits.   Navarro sought pre-suit discovery under Rule 202 and obtained a pre-suit order. The City of Dallas filed a plea to the jurisdiction. The plea was denied. Navarro asserted that luring Home Depot way for economic purposes is a proprietary act and therefore immunity does not apply. The city asserted that entering into a tax abatement agreement is a governmental function. However, the court held the allegation the City of Dallas tortiously-interfered with the Navarro agreement with Home Depot to lure away business makes the governmental nature of a tax abatement agreement irrelevant. Business recruiting is not expressly governmental and is something private persons can do. Further, a Rule 202 petition must indicate a waiver or lack of immunity, but does not need to expressly establish it. As a result, the court did not err in denying the plea and the recruiting may be proprietary. The order allowing a Rule 202 petition is interlocutory and cannot be subject to direct interlocutory appeal when immunity is not the issue.  However under the mandamus relief, the court it did agree that the order impermissibly authorized unlimited discovery which is contrary to Rule 202. Therefore, that part of the order is vacated.*

*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