Lease which included improvement requirements is not a contract for services so City maintains immunity says 13th Court of Appeals

CITY OF ALAMO, TEXAS AND ALAMO ECONOMIC DEVELOPMENT CORPORATION v. HERIBERTO OSUNA, 13-13-00317-CV, (Tex.  App. – Corpus Christi, November 20, 2014)

This is an interlocutory appeal from the denial of a plea to the jurisdiction in a breach of contract case for leased property. The Thirteenth Court of Appeals reversed the denial and rendered.

Osuna entered into a lease-purchase agreement with the City of Alamo Economic Development Corporation.  Osuna asserts the City and EDC took possession of the property even though he did not miss any payments and locked him out. While still denying the allegations, the City and EDC filed a plea to the jurisdiction claiming immunity from suit in a contract. The trial court denied the plea and the City Defendants appealed.

The court first analyzed Osuna’s argument that the lease required him to make improvements (which he did) transforming it into a services contract for which a waiver exists under Chapter 271 of the Texas Local Government Code. The court analyzed the language of the lease and held its primary purpose was for the lease of property, not services to the City and stated “…nothing in this lease-purchase agreement that could even arguably support a conclusion that Osuna agreed to provide any services to appellants.” The City was not to provide any payment for services or any compensation for activities on the property. The City and EDC had no way to enforce any alleged services under the contract. As a result, the City Defendants maintained immunity from suit. The court then noted Osuna abandoned his quantum merit claims since he omitted them from his amended petition. The court also held it was unable to find any case or statute holding immunity is unambiguously waived for civil conspiracy or unlawful lockout. As a result the plea should have been granted and the court reversed and rendered. However, in a footnote, the court noted the individual defendants did not file an appeal so the civil conspiracy claim will continue in the trial court.

If you would like to read this opinion click here. Panel: Chief Justice Valdez, Justice Benavides and
Justice Longoria.  Memorandum Opinion by Chief Justice Valdez. The attorneys listed for Rickardo Navarro and Robert Drinkard. The attorney listed for Osuna is Rogelio Solis.