Recent Texas Cases of Interest to Cities

Note: Included cases are from August 11, 2017 through September 10, 2017.

Interlocutory Appeal/Mootness: City of Sealy v. Town Park Ctr., No. 01-17-00127-CV, 2017 WL 3634025 (Tex. App.—Houston [1st Dist.] Aug. 24, 2017) (mem. op.). This is an opinion where the court held the appeal is moot, but where the city asserted mootness was not applicable due to a refiling.

Town Park Center sued the City of Sealy in the first lawsuit, but such claims ultimately were dismissed, without prejudice. Town Park then filed a second lawsuit against the city and the city’s mayor, manager, and engineer. While the claims are not in this opinion, the appellate record indicates the claims were for breach of contract, declaratory relief, and injunctive relief regarding an economic development agreement (the same agreement in the first lawsuit).  The city defendants filed a plea to the jurisdiction. The trial court granted the plea as to the city, but denied as to the officials. The mayor and city manager filed an interlocutory appeal staying all lower court proceedings, but Town Park requested it be lifted in order to non-suit. After a non-suit, without prejudice was filed, Town Park filed a third lawsuit against the city, mayor, city manager, and finance director regarding the same agreement. Town Park then filed a motion in this appeal to declare the appeal moot. The city defendants opposed the dismissal arguing the claims were not moot given the live controversy upon which Town Park filed its third suit.

The city asserted the order granting the plea as to the city in the second lawsuit, which Town Park did not appeal, precludes joining the city in the third lawsuit. However, Town Park was not required to appeal the interlocutory order dismissing the city in the second lawsuit (the current appeal) since it had the option to wait until a final judgment was entered. Utilizing this process does not extend the appellant court’s jurisdiction to hear a moot claim.  Plaintiffs have a general right to non-suit their claims even if interlocutory appeals are pending. As a result, the interlocutory appeal in the second lawsuit has become moot and is dismissed.  [Comment: the court noted in footnote #2, that the final judgment for the second lawsuit may become final due to the non-suit and such is a dismissal with prejudice for claims dismissed prior to the non-suit. However, that argument was not before them and is properly raised in the third lawsuit as to the city.]*

Plea to the Jurisdiction/Negligence: City of Houston v. Nicolai, No. 01-16-00184-CV, 2017 WL 3634279 (Tex. App.—Houston [1st Dist.] Aug. 24, 2017). This is an interlocutory appeal where the First District Court of Appeals affirmed the denial of the City’s plea to the jurisdiction in this wrongful death case.

City of Houston police officer R. Gonzales handcuffed Caroline Nicolai and placed her in the back seat of a patrol car. While transporting Nicolai, Gonzales’ vehicle was struck by a vehicle driven by Moser (who was later determined to be intoxicated). The impact ejected Nicolai who ultimately died from her injuries. Apparently, Nicolai was not restrained by a seat belt. The Nicolai family sued the city, which filed a plea to the jurisdiction. The trial court denied the plea and the city appealed.

The city’s plea did not challenge any jurisdictional facts and relied upon the pleadings taken as true. The city asserted the pleadings did not allege the negligent use of a motor vehicle but alleged the non-use of tangible personal property (i.e. seatbelt). For a vehicle “use” the employee must be actively using the vehicle at the time of the injury, and using the vehicle as a vehicle and not some unintended purpose. Both are present here. The “arising from” language requires a nexus which is something more than actual cause but less than proximate cause. Officer Gonzales was not simply failing to use the seatbelts; she was driving the car while failing to use the seatbelts. It was foreseeable to the court that if someone is not wearing a seatbelt while the car is being driven, an accident could cause the individual to be injured or killed. Since proximate cause is ultimately a fact question, the court held evidence exists to create the question for the jury, precluding the plea. The city argued, in the alternative, that Moser’s conduct was intentional under the law and therefore the city is not liable for intentional torts. However, regardless of whether Moser’s actions were intentional or not, the claims involve distinct and different negligence claims committed by Officer Gonzales. For the exception to apply, the intentional tortfeasor must be the governmental employee whose conduct is the subject of the claim. There is no allegation in this case that Officer Gonzales acted intentionally in regard to failing to secure the decedent in a seat belt.

The city next argues waiver under the Texas Tort Claims Act does not apply for negligently providing police protection under Texas Civil Practice and Remedies Code Section 101.055(3). The purpose of the exception is to “avoid judicial review of the discretionary policy decisions that governments must make in deciding how much, if any,” protection to provide.  However, a negligent implementation of policy can subject the entity to liability. The city disciplined Gonzales for failing to follow policy and secure the detainee with a seatbelt. As a result, the plea was properly denied.*

Retaliation/Disparate-Treatment: Metropolitan Transit Auth. v. Ridley, No. 01-17-00081-CV, 2017 WL 3910160 (Tex. App.—Houston [1st Dist.] Sept. 7, 2017.).  Zelma Ridley (Ridley), an African-American female, was an employee of Metropolitan Transit Authority of Harris County (Metro) from May 2008 until she retired in December 2014. During her employment, Ridley stated that she was continuously harassed because of her race. In April 2013, she was placed on a personal improvement plan (PIP) for “communication issues” which Ridley’s immediate boss thought was because of Ridley’s race and gender. Ridley filed a formal charge of discrimination with the Metro’s EEO office in September of 2013 complaining of race, gender, and age discrimination which did not give her a satisfying result. In November 2013, Ridley filed a Charge of Discrimination with the Equal Employment Commission (EEOC), but did not receive a final decision. After some medical concerns and a recommendation from her doctor, Ridley retired in December 2014, but she asserted she was constructively discharged because “no reasonable person would have continued to work under the conditions being imposed by METRO.”

Ridley sued Metro, alleging disparate-treatment, discrimination, and retaliatory conduct leading to constructive discharge. The trial court denied Metro’s plea to the jurisdiction and Metro brought this interlocutory appeal stating the trial court lacked subject-matter jurisdiction since Ridley did not establish a prima facie case on any of her claims.

As to the issue of subject matter jurisdiction, the appellate court first reviewed Ridley’s retaliation claims brought under the Texas Commission of Human Rights Act (TCHRA). Ridley contended that: (1) she was subjected to a hostile work environment because she complained about discrimination; and (2) the hostile work environment became so intolerable that a reasonable person would have felt compelled to resign which amounted to a constructive discharge. To establish retaliation, the employee must make a prima facie case of discrimination by showing: (1) she participated in a protected activity; (2) her employer took an adverse employment action against her; and (3) a causal connection existed between her protected activity and the adverse employment action. Metro claimed Ridley did not prove any of the elements of retaliation.

The court determined that Ridley did participate in a protected activity when she complained about the PIP in April 2013 and the other complaints that she made afterwards.  However, the court did not find that Ridley proved there was a causal connection between the protected activity and alleged constructive discharge. The court concluded she did not show circumstantial evidence sufficient to show the casual link.  This evidence could be: (1) failure to follow the usual policy and procedure in carrying out the challenged employment; (2) discriminatory treatment in comparison to similarly situated employees; (3) knowledge of the discrimination charge or suit by those making the adverse employment decision; (4) evidence that the stated reason for the adverse employment decision was false; and (5) the temporal proximity between the employee’s conduct and discharge. The court applied these factors to the evidence presented in Ridley’s pleading and did not find the evidence to show a causal link.  Some of the evidence involved incidents that happened before the protected activity and other evidence showed a continuation of actions taken before she complained. The incidents that Ridley asserts were worse after the protected activity coincided with a change in supervisors and not because she reported discrimination. Therefore, the court found that Ridley did not establish a prima facie case of retaliation and sustained Metro’s third issue concerning no causal connection and did not need to reach Metro’s first issue concerning no adverse employment action or second issue concerning no constructive discharge.

Next, the court reviewed Ridley’s disparate treatment claim which was based on her being passed up for an interim position. To prove disparate treatment, the plaintiff must show that she: (1) is a member of a protected class; (2) was qualified for the employment position at issue; (3) was subject to an adverse employment action; and (4) was treated less favorably than similarly situated members outside the protective class. After reviewing Ridley’s evidence, the court determined that the evidence fell short of a prima facie claim.  Though Ridley provides information about her qualifications, she did not provide any information concerning the person who received the interim position to show she had superior qualification.  Nor did Ridley show that her PIP was for any purpose other than professional development. The court sustained Metro’s fourth issue, vacated the trial court’s order and dismissed this appeal for lack of jurisdiction.

Ultra Vires/Zoning: Schmitz v. Denton Cty. Cowboy Church, No. 02-16-00114-CV, 2017 WL 3821886 (Tex. App.—Fort Worth Aug. 31, 2017). This is an appeal from a final judgment against the plaintiffs who attempted to force the Town of Ponder to enforce its zoning laws against other property owners. The Fort Worth Court of Appeals affirmed the dismissal of the town. However, the court reversed the dismissal of the other property owner.

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 the town’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 Uniform Declaratory Judgment Act (UDJA) does not waive immunity of a governmental entity. The proper defendant in an ultra vires action is the official who allegedly acted without authority, not the governmental entity itself. The plaintiffs did not sue any officials. The UDJA waives governmental immunity against claims that an ordinance, or an amendment to an ordinance, is invalid.  Plaintiffs claim they are challenging the amended ordinance so have jurisdiction. However, the record shows the town did not amend its zoning ordinance; it merely voted on motions to change the zoning classification. Open motions and votes are not ordinances and here the zoning ordinance was not changed. The town’s vote to grant an SUP was not made by ordinance, but did not have to be. Plaintiffs, therefore, are not able to challenge a non-existent ordinance and cannot show a waiver of immunity. The court also held that since the Texas Open Meetings Act and notice allegations also stem from the challenge to a non-existent ordinance, they likewise were properly dismissed.

The plaintiffs next assert the town waived immunity by its own ordinance.  However, the court held that even if the town had the authority to waive its own immunity, the language in their ordinance is not a clear and unambiguous waiver of immunity. It authorized a property owner to sue an offending property owner, not the town.

As to the Section 1983 analysis, claims based upon a government entity’s refusal or failure to enforce its own regulations do not equate to such claims.  The court held repleading would not change the lack of jurisdiction. The town’s plea was properly granted. However, the trial court erred by dismissing the church.*

Special Defect: City of Arlington v. S.C., No. 02-17-00002-CV, 2017 WL 3910992 (Tex. App.—Fort Worth Sept. 7, 2017) (mem. op.). This is an interlocutory appeal involving a jurisdictional challenge in a special defect case. The Fort Worth Court of Appeals, acknowledging the case law is murky, held that a misplaced manhole cover was not a special defect.

S.C. and her family were moving into a neighborhood in 2015 when she stepped on a manhole cover which was the wrong size for its opening. She fell into the hole, injuring her pubic bone and groin, and spent six days in the hospital. She sued the city under both a special defect and, alternatively, premise defect theory. Her minor children plead bystander injuries.  The city filed a partial summary judgment only as to the special defect claim, which the trial court denied. The city appealed.

The Fort Worth Court of Appeals panel admitted the case law was inconsistent. The Texas Supreme Court lists a special defect as the same “kind or class” as an “excavation or obstruction” to ordinary users on or near a roadway. The court listed a series of cases finding a defective cover over a hole satisfies the excavation “class or kind” test; however, the plaintiffs in those cases lost because the defect was too far from the roadway to count. The court held to qualify an “excavation- or obstruction-like condition [must] be, if not in the roadway itself, at least awfully close—near enough for the ordinary roadway user to encounter it.” Achieving ordinary-user status requires “that someone be on or in close proximity to a roadway, doing the normal things that one might expect to do on or near a roadway, whether in some sort of vehicle or on foot.”  The court noted its prior circuit opinions have listed a distinction between an open excavation as being the cause of an injury and a defectively covered excavation as being the cause, although such an analysis is not always required. It noted that Texas Supreme Court precedent requires it to interpret a waiver of immunity narrowly. While the panel listed that hypothetical aspects might qualify, the individual facts of this case, the circuit’s prior opinions, and direction from the Texas Supreme Court require it to hold the manhole issue is not a special defect. It reversed the denial, but remanded for trial as a premise defect case.*

Governmental Immunity: West Travis Cty. Pub. Util. Agency v. Travis Cty. Mun. Util. Dist. No. 12, No. 03-16-00880-CV, 2017 WL 3902625 (Tex. App.—Austin Aug. 29, 2017). In this appeal, the Austin Court of Appeals looked at whether the legislature’s waiver of immunity in Local Government Code Chapter 271 extends to legal claims arising from a wholesale water-services contract.

The Lower Colorado River Authority (LCRA) and Travis County Municipal Utility District No. 12 (MUD) entered into a contract in which LCRA was to provide raw water to the MUD. A year later, the LCRA and MUD entered into a second contract, which LCRA later assigned to West Travis County Public Utility Agency (Agency), for wholesale services for the treatment of raw water. This agreement required the MUD to pay: (1) a flat monthly charge, (2) a volumetric rate (based on the amount measured by the “Master Meter” the MUD was required to install), and (3) a connection fee for each new retail water customer the MUD acquired. This services contract was to be for the same term as the raw water contract: 40 years. The services contract provided that the agreement became effective only after the LCRA accepted the Master Meter that the MUD installed.

The MUD filed this lawsuit against the Agency contending that the Agency breached the services contract by charging the MUD excessive fees and rates that were not authorized by the services contract. The MUD pleaded that the Agency’s immunity was waived because of the MUD’s agreement to provide “Services” to the Agency in the form of the installation and conveyance of the Master Meter. The Agency filed a plea to the jurisdiction, which the trial court denied. Thus, the Agency appealed.

The court of appeals acknowledges that the Agency is a governmental entity of the State of Texas that is immune from suit unless its immunity is waived. Then, the court looks at the requirements of the immunity waiver of Chapter 271. In order for immunity to be waived there must be: (1) a written contract, (2) stating the essential terms of, (3) an agreement for providing goods or services to a local governmental entity, and (4) that is properly executed on behalf of the local governmental entity. The parties did not dispute that the agreement met the first and fourth requirements. The court concludes that the Agency had no contractual right to receive any service from the MUD. Instead, the “service” of the Master Meter installation was a condition precedent to the contract’s formation.

Because the services agreement did not meet the requirements of the Chapter 271 waiver of immunity, the Agency’s immunity was not waived. The court of appeals reversed the trial court’s decision and rendered judgment in favor of the Agency, dismissing the MUD’s claims.

Tort Claims Act: City of San Antonio v. Reyes, No. 04-16-00748-CV, 2017 WL 3701772 (Tex. App.—San Antonio Aug. 23, 2017) (mem. op.). This is a Texas Tort Claims Act vehicle accident case where the San Antonio Court of Appeals held the City of San Antonio was immune.

San Antonio Police Officer Ayars was in an automobile accident with the plaintiffs’ vehicle while responding to a “city-wide emergency tone that an officer needed assistance.” Officer Ayars proceeded through an intersection while in route resulting in the collision. Plaintiffs sued the city under the Texas Tort Claims Act for damages. The city filed a plea to the jurisdiction which was denied. The city appealed.

Under the emergency exception doctrine, the city retains its immunity from suit on a claim arising from the action of an employee while responding to an emergency call. Nonetheless, an employee responding to such emergency can still cause liability to attach if their actions are reckless. The plaintiffs did not provide counter evidence to the city’s plea and Ayer’s affidavit. The undisputed evidence establishes Officer Ayers was responding to an emergency. When he approached the intersection, he slowed, observed the situation, and proceeded through. Assuming, as plaintiffs allege, the light facing Officer Ayers was red, he was authorized to proceed through the intersection in an emergency situation. Plaintiffs presented no evidence the actions were reckless. The plaintiffs make an alternative argument that the city waived the “emergency exception” defense because it waited eleven months before raising it. However, no support exists for the position. Plaintiffs did not request additional discovery or continuances. The city retains immunity and the plea should have been granted.*

Collective Bargaining: City of San Antonio v. San Antonio Firefighters’ Assoc., No. 04-15-00819-CV, 2017 WL 3701778 (Tex. App.—San Antonio Aug. 23, 2017). This is a permissive appeal, which was allowed by the court, where the city requested the court of appeals review the denial of its motion for summary judgment seeking to hold the “evergreen” clause of its collective bargaining contract void as an unconstitutional debt. The court determined the clause was not an unconstitutional debt.

The city and firefighter union entered into a multi-year collective bargaining agreement.  Because the contracts require council and union member approval, which takes time, the contracts contained “evergreen” clauses, which state the effective contract would continue in effect until a specified future date unless first replaced by a successor agreement or terminated by mutual agreement. At the time of suit, the union and the city had not adopted a successor agreement or terminated the current collective bargaining agreement (CBA). The city sought a declaration the clause was void as an unconstitutional debt or, in the alternative, as against public policy. The trial court denied the city’s summary judgment motion, which prompted this permissive appeal.

Article XI, Section 5 and Section 7 of the Texas Constitution prohibit debts by a city unless a sinking fund with revenue tax commitments are in place. The drafters intended to require local governments to operate on a cash basis and to limit their ability to pledge future revenues for current debts. The court analyzed the term “debt” as referenced in the Texas Constitution. After analyzing case law, the court held a “debt” for constitutional purposes is a pecuniary obligation which cannot be satisfied out of current revenues for the year or savings. A contract can avoid constitutional infirmity if it is conditioned on a yearly appropriation of funds.  However, this CBA does not contain such a provision. The city asserts “[w]hen the CBA was created in 2011, an absolute debt was created at once with only the time of payment being postponed.” The amount of the “debt” is presumably the total expense of complying with the contract, including the value of all the wages and benefits estimated to be due from 2011 through 2024.  According to the union, employee wages and benefits are not “debts” within the meaning of the Texas Constitution because no amount will be owed for a future year’s wages and benefits until work is performed by fire fighters and an obligation to pay them is incurred. The CBA sets a schedule of payments for when work is performed but is not a contract for employment. In order to succeed in its claims, the city must establish either that the entire CBA constitutes a debt or that non-severable obligations imposed by the CBA are unconstitutional debt, rendering the CBA void in its entirety. Conversely, if there are any severable provisions of the CBA that are not void for violating Sections 5 and 7 of Article XI of the Texas Constitution, the entire CBA is not void and the trial court properly denied the motion for summary judgment.  After a very long analysis of different provisions of the contract, the court held the contract does not create a debt. The actual amount the city will owe in a given year for operating expenses depends on the number and classification of employees. The contract does not expressly obligate the city to pay wages and benefits and does not contain any minimum staffing or funding requirements. As a result, the trial court properly denied the motion.*

Governmental Immunity: City of Pearsall v. Tobias, No. 04-16-00815-CV, 2017 WL 3495137 (Tex. App.—San Antonio Aug. 16, 2017). The City of Pearsall entered into a two-year contract with Robert Tobias to serve as city manager. The contract provided for a cash payment of one year’s salary if Tobias was involuntarily terminated or suspended by the city council for any reason. The agreement also required Tobias to live within the City of Pearsall but provided a grace period of six months. After five-and-a-half months, the council voted to terminate Tobias’s employment without severance pay. The city stated that Tobias’s failure to move to the City of Pearsall was the reason for termination. Tobias filed suit against the city alleging breach of contract. The trial court denied the city’s plea to the jurisdiction, and the city appealed.

The city argues that it is immune from the breach of contract claim because: (1) the contract does not contain the essential terms of the agreement; (2) the contract does not provide for goods or services; (3) the contract was not properly executed; and (4) the damages Tobias seeks are not due and owed under the contract. Tobias filed a cross-appeal arguing: (1) the City of Pearsall waived its right to appeal by failing to timely file a notice of appeal; and (2) the trial court erred in concluding Tobias failed to sufficiently allege the City of Pearsall waived immunity for attorney’s fees.

The court of appeals noted that the trial court rendered a decision on October 31, 2016; however, the only signed written order in the appellate record was signed on December 5, 2016. As a result, the City of Pearsall’s notice was due 20 dates after that date. Because the city filed its notice of appeal on December 5, 2016, the city did not waive its right to appeal.

The court then analyzes the Chapter 271 waiver of immunity requirements. The court concludes that the contract did provide the essential terms required by Section 271.151 of the Local Government Code. Specifically, the court provides that the agreement states the salary and how it was to be paid to Tobias, the number of work hours, and the requirement that the city evaluate Tobias’s performance. Additionally, the court provides that services include what an employee provides his employer by his efforts. Thus, the contract required Tobias to provide his services to the city. The court also determines that the contract was properly executed. The court was not convinced by the city’s argument that the contractual provision providing a grace period for the city manager to move into the city conflicted with the city’s charter provision requiring the city manager to live within the city. Thus, the contract was properly executed. Lastly, the court determines that the severance pay in the termination agreement was “due and owed” under the contract. In doing so, the court rejects the city’s argument that the five-and-a-half months salary that Tobias received while employed by the city was all that was “due and owed” under the contract.

The court of appeals affirmed the trial court’s order denying the city’s plea to the jurisdiction and remanded the case to the trial court on the question of attorney’s fees. 

Premise Liability: Morgan v. City of Terrell, No. 05-16-00554-CV, 2017 WL 3484516 (Tex. App.―Dallas Aug. 15, 2017) (mem. op.). This is a premise liability/negligent policy implementation case where the Dallas Court of Appeals affirmed the granting of the city’s plea to the jurisdiction.

Morgan sued the city alleging that an unmarked sidewalk ledge constituted a dangerous condition causing her to fall. The city filed a plea to the jurisdiction asserting the alleged “dangerous condition” was actually the design of the walkway, which is a discretionary function.  Morgan asserted the design was negligently implemented. The trial court granted the plea, and Morgan appealed.

It is well settled that the design of a public work, such as a roadway, involves many policy decisions, and is a discretionary function. Likewise, the type of safety features to install on a public work is a discretionary function. While immunity can be waived if the claim is for the negligent implementation of the decision, such waiver must be tied to the execution and not the discretionary formation. Morgan claimed the city’s ordinances created a nondiscretionary duty to make the sidewalks safe.  However, Morgan did not include the ordinances in the record and did not request the court take judicial notice of the ordinances. Morgan has included in her brief “only the language of portions of provisions she has plucked from the Ordinance[s].” As a result, the court held the issues involving the ordinances were not properly before it.  However, even if it were, the selective provisions do not support Morgan’s position. The building code section states sidewalks “shall be set at a grade to provide for a certain slope range or as directed by the city engineer.” The court felt this language made clear the city made a policy decision to retain discretion to alter the specifications of sidewalks when needed.  Further, under the Neighborhood Integrity Code, whenever a sidewalk becomes dangerous, it is a public nuisance. However, those provisions state the chief building official “may” act to remedy the nuisance, but leaves the official with discretion to abate or not abate. As a result, nothing relating to a negligent implementation exists and everything points to the discretionary actions of the city. The plea was properly granted.*

Governmental Immunity: City of Tyler v. Owens, No. 12-16-00128-CV, 2017 WL 3499949 (Tex. App.—Tyler Aug. 16, 2017) (mem. op.). On February 10, 2017, the City of Tyler issued a construction permit to a property owner to build a boathouse and pier on property leased by the city to the property owner on Lake Tyler. Two other neighboring property owners, Owens and Terry (“Owens”) filed suit against the city, seeking to enjoin the construction of the boathouse, along with actual and exemplary damages, a declaratory judgment, injunctive relief, and attorney’s fees. The trial court granted a temporary restraining order against the city and the property owner, stopping the construction of the boathouse and pier. The city appealed.

On appeal, the primary issue is related to whether the city performed a governmental function in determining the location of the boathouse and issuing the construction permit. Owens contended that the city’s act in subdividing and leasing the lakefront residential lots was a proprietary function, citing pre-Texas Tort Claims Act cases holding that under the common law, a city leasing its property acts in a proprietary capacity. The court specifically looked at whether the relocation of the pier and boathouse plans as part of the permit application, the issuance of the permit, and the construction authorized by the permit were governmental or proprietary functions. Looking at the Tort Claims Act, the court determined that those decisions are part of the city’s engineering and planning functions, exercised through its building codes and inspection process, on its reservoir as part of the city’s waterworks. Therefore, the city was entitled to governmental immunity absent a legislative waiver.

Owens contended that Local Government Code Chapter 271 is a legislative waiver of governmental immunity that applies to the lease at issue in this case. The court held that the relevant provisions of the city’s lease of property to all property owners involved are not “services” as that term is used in Chapter 271 of the Local Government Code, as the leases do not require the city to pay for services, which is a factor weighing against waiver of immunity. Instead, the applicable provisions of the lease represent obligations imposed on the lessees arising only in the event that a contingency occurs related to environmental contamination on the property. The benefits to the city are too attenuated to constitute a waiver of its governmental immunity. The appellate court reversed the order of the trial court and rendered judgment that the city be dismissed from the suit.

Land Acquisition: Trevino v. City of Pearland, No. 14-16-00298-CV, 2017 WL 3666333 (Tex. App.—Houston [14th Dist.] Aug. 24, 2017). The City of Pearland and Frank and Sidelia Trevino entered into a purchase agreement for the city to purchase real property from the Trevinos for a roadway expansion. The agreement contained a sentence stating that the city would provide relocation assistance per a specific letter. Ultimately, a dispute arose related to the amount the city agreed to pay the Trevinos for relocation assistance. The city asserted that it owed the Trevinos, at most, $84,235 for relocation. Meanwhile, the Trevinos claimed the city owed them between $121,235 and $125,935 in relocation assistance payments. The trial court signed a final judgment declaring that the city and the Trevinos entered into a valid and enforceable contract and that the city was contractually obligated to pay the Trevinos $84,235 in relocation assistance. The court also awarded the city $62,010 in attorney’s fees under the Declaratory Judgments Act. The Trevinos appealed.

In their first three issues, the Trevinos claimed that the trial court erred by not awarding them attorney’s fees, prejudgment interest, and costs because the Trevinos were actually the prevailing party at the jury trial on liability. The court held that because the city sought a declaration that it was contractually obligated to pay the Trevinos no more than $84,235 for relocation expense, that the possibility was left open for the city to pay less than that amount. Because the jury found the city owed $84,235, the court held the jury did not find in the city’s favor. Consequently, the Trevinos should be considered the prevailing party, and the trial court did err in not awarding the Trevinos attorneys fees, prejudgment interest, and costs. Further, the court reversed the attorney’s fee awards in favor of the city and remanded for the trial court to determine whether it is equitable and just to award the city attorney’s fees under the Declaratory Judgments Act. 

Taxpayer Standing: Turner v. Robinson, No.14-16-00393-CV, 2017 WL 3581636 (Tex. App.—Houston [14th Dist.] Aug. 17, 2017). The Fourteenth Court of Appeals in Houston determined the plaintiffs had taxpayer standing to challenge two propositions filed in the 2004 elections and to bring ultra vires claims against the mayor’s office.

This opinion is one in a long series of opinions and cases involving the same or similar parties. Plaintiffs sued the City of Houston and the mayor, in his official capacity, for declaratory and injunctive relief (including ultra vires claims) involving Proposition 1 (limiting annual increases in property taxes and utility rates) and Proposition 2 (amending the city charter and requiring voter approval for increase which go beyond inflation and population rates).  In the 2004 election, both propositions passed. After the election, for two independent reasons, the city determined Proposition 1 is legally binding and Proposition 2 would not be enforced. Proposition 1 had a supremacy clause over any other propositions if it received more popular votes.  Further, the charter stated any proposition which receives the higher votes prevails. Various suits followed resulting in several appellate opinions already. In this matter, the plaintiffs filed actions regarding the validity of Proposition 2 and the city’s future compliance with both propositions. The city filed a plea to the jurisdiction which was denied. The city appealed.

Standing is a constitutional prerequisite to maintaining suit. Taxpayer standing requires: (1) that the plaintiff is a taxpayer; and (2) that public funds are being expended on the allegedly illegal activity. Plaintiffs did not sue to recoup funds but to prevent future expenditures on alleged unauthorized activities. As a result, they have taxpayer standing. The plaintiffs do not allege the mayor failed to perform a ministerial act, but instead assert he acted without legal authority. Such is a proper ultra vires claim. And while the plaintiffs focus on the legal authority of the propositions, their pleadings also seek a declaration as to their validity. As a result, they are proper for declaratory judgment.*

*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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