City immune from suit for traffic light displaying “walk” signal at same time as green “turn arrow” says 13th Court of Appeals

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City of Edinburg v. Melinda Balli  13-17-00183-CV (Tex.App–, Corpus Christi, November 9, 2017)

This is a Texas Tort Claims Act case where the Corpus Christi Court of Appeals reversed the denial of the City’s plea to the jurisdiction and dismissed the Plaintiff’s claims.

Balli asserts she was struck by a vehicle as she used a crosswalk near the Hidalgo County Courthouse.  She asserts the pedestrian traffic light displayed a “walk” signal for pedestrians when she began to cross, however, the traffic light displayed a green arrow for turning vehicles, thereby causing the accident.  She asserts the City entered into a Municipal Maintenance Agreement with the State of Texas, in which the City undertook the duty “to make changes in the design and operation of the highway traffic signal(s) as it may deem necessary . . . .” and to provide and maintain traffic lights at various intersections. According to Balli’s petition, the City was aware of the problem with the traffic signals due to a similar collision on January 17, 2012. The City filed a plea to the jurisdiction arguing the lights were not malfunctioning, but were operating as designed by TxDOT to display a “walk” and a “turn arrow” at the same time. Vehicles are required to yield to pedestrians in the cross-walks. The trial court denied the plea and the City appealed.

Under the Texas Tort Claims Act (“TTCA”), the Texas Supreme Court has found a waiver of immunity “only in those situations in which the sign or signal was either (1) unable to convey the intended traffic control information, or (2) conveyed traffic control information other than what was intended.”  The term “condition” under the TTCA refers exclusively to “something ‘wrong’ with the traffic sign or signal such that it would require correction after notice.” Further, under the TTCA, a governmental entity remains immune from suits arising from its discretionary acts and omissions. The City asserts it assumed responsibility for the lights in 2012, and the City has not changed the lights’ programming originally inserted by TxDOT since that time. The City reasoned that because the lights “convey[ed] the intended traffic control information,” the traffic lights do not qualify as a wrongful condition of real property for which immunity would be waived. Based on testimony attached to the plea, the City utilized its discretion not to change the design or programming of the lights since they complied with TxDOT guidelines. Since the City established the lights were working as intended, Balli had the burden to negate that factual assertion. However, the only evidence Balli provides merely attacks the wisdom of that intent and the discretionary design choices, not the functioning of the lights. Balli has not produced any evidence that would create a fact issue concerning the existence of a “condition” in real property and waive immunity. The trial court should have granted the plea.

If you want to read this opinion, click here. The panel consists of Justices Rodriguez,  Benavides, and Longoria. Justice Rodriguez delivered the opinion of the court. To see the attorneys listed for the Appellant and Appellee click here.

 

Wrong-sized manhole cover was not a special defect holds Fort Worth Court of Appeals

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City of Arlington v. S.C.,et al. 02-17-00002-CV (Tex. App. – Fort Worth, September 7, 2017)

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 the 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 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.

 

Photo provided in opinion and annotated during Plaintiff’s deposition.

If you would like to read this opinion click here. Panel includes Chief Justice Livingston, Justice Gabriel and Justice Kerr.  Memorandum Opinion by Justice Kerr. The attorney listed for the City is Robert H. Fugate. The attorney listed for the Plaintiffs is Shelton Burgess Williams.

4th Court of Appeals holds developer properly pled breach of contract claim for wastewater development agreement

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NBL 300 Group Ltd v. Guadalupe-Blanco River Authority 04-17-00264-CV (Tex.App— San Antonio, August 16, 2017)

This is an immunity/breach of contract case where the San Antonio Court of Appeals reversed the granting of Guadalupe-Blanco River Authority’s (“GBRA”) plea to the jurisdiction.

NBL was developing certain properties known as Legend Pond. As part of the development NBL and GBRA entered into an agreement for the construction of a “wet well” and “lift station” (wastewater systems). NBL was to provide and oversee/arrange for the engineering, design, and construction of various improvements to the properties. GBRA was to apply certain connection fees and charges to reimburse NBL for its initial outlay. After completion of the development, NBL sued GBRA asserting breach and a failure to implement connection rate measures. GBRA filed a plea to the jurisdiction which the trial court granted. NBL appealed.

For a contract to be subject to Tex. Loc. Gov’t Code §271.152’s waiver of immunity, it (1) must be in writing, (2) state the essential terms of the agreement, (3) provide for goods or services, (4) to the local governmental entity, and (5) be executed on behalf of the local governmental entity. Under the contract NBL was required to propose a master plan, including design, permitting, acquisition, and construction of the facilities. NBL was responsible for engineering and permitting fees. In return, GBRA was required to approve all plans and specifications and to establish, to collect, and to forward fees to NBL as reimbursement for monies expended.  The court held constructing, developing, leasing, and bearing all risk of loss or damage to the facilities provides a “service.” NBL plead the contract was for services and all other essential terms. GBRA asserts NBL still does not plead damages via money’s due and owed.  However, the court held NBL alleges that GBRA: (1) refused to perform obligations under the contract; (2) failed and refused to pay amounts owed under the contract; (3) failed to comply with its obligations under the contract; and (4) that the breach was material because GBRA did not substantially perform a material obligation required under the contract. No other specifics were provided. As for damages, NBL seeks loss of the benefit of the bargain, loss of investment opportunity, loss of fees, and attorney’s fees. Again, no specifics.  However, the court held from a pleadings standpoint, such allegations were sufficient to qualify as a properly pled petition. The plea should not have been granted.

If you would like to read this opinion click here. The panel includes Justices Barnard, Alvarez, and Chapa. Justice Alvarez delivered the opinion of the court. Attorney listed for NBL 300 Group is Rafael Pizana III. Attorneys listed for the Guadalupe – Blanco River Authority are Lowell F. Denton and Scott Michael Tschirhart.


 

Court held City immune from Plaintiff’s negligent implementation/premise defect claims due to discretion in ordinances

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Lois Morgan v. City of Terrell, Texas 05-16-00554-CV (Tex. App— Dallas, August 15, 2017)

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 after she fell on a sidewalk and alleged an unmarked ledge constituted a dangerous condition. 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.

If you would like to read this opinion click here. The panel includes Justices Bridges, Myers, and Brown. Justice Brown delivered the opinion of the court. Attorneys listed for Lois Morgan are Richard Allan Stucky and Matthew J. Kita. Attorneys listed for the City are Peter G. Smith, Braden Metcalf, and Victoria Thomas.


 

U.S. 5th Circuit holds utility district’s federal loan could prevent City from expanding its CCN.

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Green Valley Special Utility District v. City of Cibolo, TX, No. 16-5182 ( 5th Cir. August 2,2017)

In this case the United States Fifth Circuit Court of Appeals held the Green Valley Special Utility District (“Green Valley”) is entitled to go forward on it injunction to prohibit the City from encroaching on its system.

The Public Utility Commission of Texas (“PUC”) issues certificates of convenience and necessity (“CCNs”), which give holders the exclusive right to provide water or sewer service within particular service areas. Green Valley holds a CCN for water and a CCN for sewer services within a defined area. In 2003, Green Valley obtained a $584,000 loan from the United States to fund its water service. The loan was secured by the property within both Green Valley’s water and sewer systems.   In 2016 the City of Cibolo applied to the PUC for a CCN to provide sewer services to its citizens, which encompasses part of Green Valley’s CCN. To grant it, the PUC would have to strip Green Valley of part of its CCN.  Green Valley opposed the application and sued arguing federal law prohibited an alteration to its CCN due to its loan, specifically 7 U.S.C. § 1926(b). The federal trial court dismissed Green Valley’s suit holding §1926(b) applied only to the system for which the loan was made (water), not the property used to secure the loan (water and sewer system).  Green Valley appealed.

The 5th Circuit noted this “is a tight question of statutory interpretation.”  Section 1926(b) prohibits the curtailment or limitation of “[t]he service provided or made available …” § 1926(b).   The dispute is over the meaning of “service,” which the statute does not define. Green Valley asserts it should apply to its “integrated” water-and-sewer service.  The City argued through the use of grammar aides that service applies only to the service funded. The 5th Circuit disagreed with the City’s arguments. Section 1926(b) has two purposes: “(1) to encourage rural water development by expanding the number of potential users of such systems, thereby decreasing the per-user cost, and (2) to safeguard the viability and financial security of such associations . . . by protecting them from the expansion of nearby cities and towns.” Green Valley’s interpretation is consistent with those purposes and not inconsistent with the wording of the statute. The order granting the City’s Rule 12(b)(6) motion is reversed and the case is remanded.

If you would like to read this opinion click here. The panel includes Circuit Judges Higginbotham, Smith, and Haynes. Circuit Judge Smith delivered the opinion of the court. Attorney listed for Green Valley is Mr. Paul M. Terrill, III. Attorney listed for the City of Cibolo is Mr. Lowell Frank Denton.

 

City waived immunity in breach of contract case for solid waste disposal services

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City of Rio Grande City, Texas, and Joel Villarreal, Herman R. Garza III, Arcadio J. Salinas III, Rey Ramirez, and Dave Jones in their Official Capacities v. BFI Waste Services of Texas, LP d/b/a Allied Waste Services of Rio Grande Valley,04-15-00729-CV (Tex. App – San Antonio, September 21,2016)

This is an appeal from the denial of a plea to the jurisdiction regarding a breach of contract claim arising from a solid waste disposal contract. The court affirmed in part and reversed in part.

In 2011, Allied entered into a contract with the City to be the exclusive provider of solid waste disposal services within the City’s limits through September 2018. In April 2015, the City notified Allied that it had failed to perform its obligations under the contract and also improperly billed the City for services Allied did not perform. According to the City, when Allied failed to cure the breach it terminated the contract. Allied contracted with Grande to take over solid waste disposal. Allied sued the City and Grande. Allied obtained a temporary restraining order prohibiting the City and its agents from taking actions inconsistent with Allied’s contract rights. The City counterclaimed, then removed the case to federal court. While the case was removed the City passed a resolution terminating the contract in an attempt to correct an alleged Texas Open Meetings Act problem. The federal court then remanded the case, sanctioned the City for improper removal, then the state trial court signed a second TRO.  The City filed a plea which the trial court denied.  The City filed this appeal as to the plea and TRO.

The court first held that Grande is not entitled to derivative governmental immunity. In Brown & Gay Eng’g, Inc. v. Olivares, 461 S.W.3d 117, 124 (Tex. 2015) the Texas Supreme Court noted governmental immunity was designed to guard against “unforeseen expenditures” associated with the government defending lawsuits and paying judgments “that could hamper government functions” by diverting funds from their allocated purposes. Immunizing a private contractor does not further this purpose. Further, the allegations against Grande interfering with an existing contract occurred prior to it obtaining the contract with the City, so immunity still would not apply for acts within that time period. Next the court held the allegations against the officials, in their official capacity, were sufficient to trigger an ultra vires claim.

As to the City, in order for the trial court to have jurisdiction over a contract claim asserted against a local governmental entity, the plaintiff must establish “a demand for certain kinds of damages” as limited by §271.153 of the Texas Local Government Code.  Allied requested the “balance due and owed” under the contract, which is recoverable under §271.153. Allied also requested additional damages, including actual and consequential damages, as well as pre- and post- judgment interest, costs of court, reasonable and necessary attorneys’ fees, injunctive relief, and declaratory judgment. Some of these additional damages are not recoverable under §271.153. Allied responds that the City waived immunity from breach of contract damages by filing counterclaims. That argument only applies to an offset for claims which are germane or connected with the counterclaims. Allied’s breach of contract claim and the City’s breach of contract counterclaim arise from the same facts and controversy.  As a result, the trial court has jurisdiction over the controversy. To the extent Allied requests declaratory judgment relief, Allied’s claims do not fall within the narrow waiver of immunity since the validity of an ordinance is not being challenged. Next the court held the claims brought under the Texas Open Meetings Act were not moot even after the City moved to correct any alleged mistake in the notice at a subsequent meeting. Allied also alleged the City’s actions were in violation of the contracts clause and Fourteenth Amendment of the United States Constitution. To prevent interference with its constitutional rights, Allied seeks only injunctive relief.  Since the constitutional claim is only seeking injunctive relief and not monetary damages, it is not barred by immunity. [Comment: This seems contrary to the line of cases noting a party cannot disguise a claim for monetary damages in a contract through equitable claims.] The court found Allied alleged a due process violation based on a constitutional contract claim.  However, Allied’s claim the City abused the removal process is not the same facts and controversy as the City’s counterclaims and does not fall under the Texas Tort Claims Act. Therefore, the declaratory judgment and abuse of process claims should have been dismissed, but all other claims can properly go forward.

If you would like to read this opinion click here. The Panel includes Justice Angelini, Justice Barnard, and Justice Pulliam. Justice Pulliam delivered the opinion of the court.  Attorneys listed for the City are Jacqueline LeFevre Salinas, Antonio Martinez and Brandy Wingate Voss. Attorneys listed for Allied are Gilberto Hinojosa and John David Franz.

Homeowners properly pled a taking by flooding due to channel reconstruction and temporary embankments says El Paso Court of Appeals

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CITY OF SOCORRO, Texas v.  SAMUEL CAMPOS, et al, 08-14-00295-CV (Tex.App— El Paso, September 14,2016)

This is a takings/flooding case where the El Paso Court of Appeals held the Plaintiffs properly pled a takings case.

The residents contend that the City of Socorro intentionally caused flooding by constructing a ditch, and later two embankments, that were intended to protect one subdivision (Valley Ridge) at the expense of their neighborhood (Patti Jo Neighborhood). In 2006 El Paso and it surrounding area suffered a historic rain event. To remedy the flooding in the Valley Ridge Subdivision, the City of Socorro in 2009 built a diversion channel designed to intercept water and mud coming down the Sparks Arroyo and redirect it towards another existing drainage channel. These channels would redirect the flow around the Valley Ridge Subdivision and deposit it onto a tract of land to the east. In 2010, the United States Army Corps of Engineers issued a report noting that Socorro’s actions had diverted water from its original flow path. That same year, the El Paso Water Utilities, El Paso County, and the Texas Water Development Board released a master storm water plan that recognized Socorro’s efforts were “intended to relocate the arroyo flow path.” The storm water plan made detailed recommendations to address the risk of flooding to downstream communities caused by Socorro’s actions, but the City did not implement them. In a three-day period in September 2013, the area received over six inches of rainfall. Socorro’s diversion channel worked in the sense that the Valley Ridge subdivision was spared any flooding from the upstream direction, but the water and mud from the Spark’s arroyo collected on the east side of Thunder Road to such an extent that the Valley Ridge subdivision was once again threatened with flooding. So the City created two temporary sand embankments to stop the flooding. Unfortunately, the redirection of water poured onto the Patti Jo Neighborhood, flooding the Plaintiffs’ homes. Plaintiffs asserted both through the original 2009 diversion channel, and the 2013 Thunder Road embankments, Socorro purposely redirected the flow of water from the Valley Ridge subdivision towards the Patti Jo Neighborhood. They allege that the City of Socorro was “substantially certain” these actions would cause flooding and damage to their homes.  The City filed a plea to the jurisdiction which the trial court denied.

A takings claim consists of three elements: (1) an intentional act by the government under its lawful authority, (2) resulting in a taking, damaging, or destruction of the plaintiff’s property, and (3) for public use. The intent element requires those seeking redress to show that the government “intentionally took or damaged their property . . . or was substantially certain that would be the result.” It is not enough that the act causing the harm is intentional; the governmental entity must know to a substantial certainty that the harm complained of would occur. Accordingly, a takings claim cannot rest on mere negligence. The court held that the mere possibility of future flooding would not rise to the level of a constitutional taking.  However, the petition as a whole alleges that the diversion of water and mud from the 2009 ditch plus the funneling of that water across by the sand embankments is what extensively damaged their property. The pleadings allege the City was substantially certain the embankments combining of the diversion water from the channels would result in flooding of their homes. And while the court held the case law supports that a single flood event is not usually the basis of a taking, the court held multiple floods are not a requirement. As a result, the Plaintiffs properly pled that the City was substantially certain that the combined channel plus temporary embankments equates to an intentional taking.  The court did note that such a determination was limited to analyzing the four corners of the pleadings only and should this case ever return on a factual record the court may determine a taking is not supported under the facts. But, from a pleadings standpoint, the Plaintiffs are permitted to go forward.

If you would like to read this opinion click here. The Panel includes Chief Justice McClure, Justice Rodriguez and Senior Judge Larsen.  Chief Justice McClure delivered the opinion on the court. Attorneys listed for the City are Kurt Paxson,. James A. Martinez and John P. Mobbs. Attorneys listed for the Plaintiffs are Christopher C. Benoit, Lynn Anne Coyle,  Francisco  X. Dominguez , Michael Russell, Robert Doggett and Alberto Mesta Jr.

City immune from suit for reverter given language of deed says 4th Court of Appeals

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The City of Laredo v. Northtown Development, Inc. and Gateway Centennial Development, Co., 04-15-00736-CV (Tex. App—San Antonio, August 10,2016)

This is a takings case based on an alleged reverter in public property where the Fourth Court of Appeals reversed the denial of the City’s plea to the jurisdiction and dismissed the case.

Northtown Development, Inc. and Gateway Centennial Development Co. (“Northtown”) conveyed land to a utility district to build a wastewater treatment plan. It contained a reverter that if the property was ever stopped being used for a public purpose, the property would revert back to Northtown.  The utility district was eventually annexed by the City which assumed the waste water treatment plant and the property with the reverter. By 2011, the City had constructed a new wastewater treatment plant on the Property. The original plant was built on the western side of the Property, while the new plant was built on the eastern side.  Northtown took the position the City had abandoned the old plant on the western side which therefore reverted back to Northtown. The City asserted it had a force main, transmission lines, and other facilities still on the western side, it has plans to build a bigger plant by 2030 on the western side to accommodate growth as well as the fact the reverter language was only triggered if the entire parcel was abandoned.   Northtown sued for declaratory judgment and for a taking under the Texas Constitution. The City filed a plea to the jurisdiction which was denied. The City appealed.

The court first held Northtown’s declaratory judgment claim was nothing more than a recasting of its takings claim. A plaintiff cannot circumvent immunity by recasting a claim for monetary value as a declaratory judgment. Because Northtown’s sole purpose for obtaining a declaration that the possibility of reverter in the deed was triggered was to obtain a money judgment, the City’s immunity is not waived. Next, the court focused on only one of four arguments made by the City – the fact the reverter language is only triggered by complete abandonment of the property. The court analyzed the language within the deed carefully. Reading the plain language of the deed, the possibility of reverter addresses the use of the “tract” of land and upon the expiration of the use as to the “tract” of land, the determinable fee terminates and “title to the entirety” of the “tract” reverts to Northtown. The court held the deed only provides for a possibility of reverter of the “entirety” of the Property in the event none of the Property is used for purposes of operating a wastewater treatment plant or public purpose.  Since it is undisputed the eastern portion of the property operates the new plant, Northtown’s takings claim fails as a matter of law. The trial court should have granted the plea.  The order is reversed and the court rendered judgment for the City.

If you would like to read this opinion click here. The panel includes Chief Justice Marion, Justice Martinez, and Justice Pulliam. Justice Martinez delivered the opinion of the court. Attorneys for the City: Ryan  Henry and Artin DerOhanian. Attorneys for Northtown: Kelly Feicht, Albert M. Gutierrez and Carlos E. Flores.

County properly initiated clarification of interest in public road; statute of repose can be raised in plea to the jurisdiction

John Herbert Matthews v. Colorado County, 01-16-00092-CV (Tex. App—Houston [1st Dist.] July 26,2016)

This is a road abandonment case where the First District Court of Appeals affirmed the granting of the County’s plea to the jurisdiction.

In 1951, the Colorado County Commissioners Court commissioned the creation of a road map of all existing county roads of Colorado County. In 1953, the Commissioners Court ordered the discontinuation of a portion of County Road 79.  However, the County approved the road map it commenced in 1951 without any discontinuation of C.R. 79. In 2003, the Legislature adopted Chapter 258 of the Transportation Code which allows a Texas county to adopt a county road map in order to “clarify the existence of a public interest in a road.” The County initiated steps under the statute to clarify a public interest in all of 79 with no abandoned sections. On November 5, 2014, Matthews and seven other property owners filed an application for confirmation of discontinuance of abandoned public road. When the County denied the request, they filed suit. However, the trial court granted the County’s plea to the jurisdiction and they appealed.

Section 258.007 states that Chapter 258 “applies only to a county that initiates or completes compliance with the provisions of this chapter before September 1, 2011.”  Matthews argues the County failed to properly initiate the procedures under Chapter 258, so it therefore cannot take advantage of its application. However, the court examined the word “initiates” under a plain and ordinary meaning standard and held the County did initiate the process prior to the deadline. Specifically, the County hired legal counsel, conducted preliminary review of county maintained roads and identified those in which the county intended to claim a public interest, and created an index of roads in the ad valorem tax statements. The commissioner’s order specifically noted that it was uncertain whether the County would be able to complete the entire process prior to September 1, 2011, and that the order’s express purpose was “to document the facts set forth above, and to demonstrate that Colorado County has initiated steps reasonably designed and intended to comply in full with the requirements of Chapter 258, Texas Transportation Code.” The court agreed such acts qualify as “initiating” the process prior to the September 1, 2011 deadline. Next, §258.004 qualifies as a statute of repose, which begins to run from a specific date without regard to the accrual of a cause of action. A statute of repose creates a substantive right to be free of liability after a legislatively-determined period. Adopting the DeMagaloni line of cases, the court held a statute of repose is a jurisdictional defect in relation to a governmental entity so could be raised in a plea.  Matthews filed outside the statute so is time barred.

If you would like to read this opinion click here. The panel Includes Chief Justice Radack, Justice Jennings, and Justice Lloyd. Justice Lloyd delivered the opinion of the court.  The attorneys listed for Appellant are Steven C. Haley and Christopher Hardy. The attorney listed for the County is Robert Thrane Bass.

County’s immunity waived for both delay and disruption damages in breach of contract suit says 5th Court of Appeals

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County of Galveston, Texas v. Triple B Services, LLP 01-15-00565-CV (Tex. App.- Houston[1st Dist.], May 26th 2016)

This is a contractual immunity case involving a road construction project where the First District Court of Appeals affirmed-in-part and reversed-in-part the denial of a plea to the jurisdiction.

Triple B Services, LLP filed a lawsuit against Galveston County in a dispute over a road-expansion project. Under the contract, the County was responsible for moving certain utilities. Although Triple B’s plans for the construction project anticipated that the County would move the utilities by a particular date, the County did not move the utilities until almost a year later.  Triple B contends that it incurred additional costs to timely complete the project as a direct result of the County’s alleged delay in moving the utilities. After completing the expansion on time, Triple B sued the County for breach of contract. The County filed a plea to the jurisdiction which the trial court denied. The County appealed.

The Legislature has provided a limited waiver of immunity for breach-of-construction-contract lawsuits against a county. Tex. Loc. Gov’t Code §262.007 (West 2005). Although Triple B’s expert testified to costs that Triple B incurred “as a direct result of County-caused delays in completing utility adjustments,” he explicitly denied that the damages were “delay damages” as understood in construction law. He distinguished between “delay” damages and “disruption” damages. The County contends that the phrase “owner-caused delays” in §262.007(b)(1) of the Texas Local Government Code limits the statute’s application to “delay damages,” and, therefore, does not include “disruption damages.” And, because Triple B’s expert testified that Triple B was not seeking “delay damages,” the County asserts it remains immune. Further, the County asserts the damages Triple B alleges are consequential damages, for which immunity is not waived. However, the court disagreed and held §262.007 allows a claim for disruption damages against a county if the disruption damages directly result from the county’s delay in performing its contractual obligations. Based on the limited record, the court held the alleged damages could also be the “direct result” of the County’s failure to timely act. Further, the Texas Prompt Pay Act (“PPA”) applies solely to contracts between a vendor and a government entity. Based on the plain text of §262.007, a county may be sued for late payment and “interest as allowed by law.” The interest sought by Triple B is “interest allowed by law”—namely, allowed by the PPA—for which immunity is waived. Finally, while Chapter 262 waives immunity for attorney’s fees, Triple B failed to properly plead a basis for receiving such fees. The statute is a waiver of immunity and not a basis for a substantive claim for attorney’s fees. As such the plea should have been granted as to such fees.

To read the opinion click here. Panel consists of Justices Bland, Brown, and Lloyd. Opinion issued by Justice Brown. Attorneys for the County of Galveston are Robert Barron Boemer, Paul Ready and Barry C. Willey.  Attorneys for Triple B Services, LLP are William Jason Walker and William Bart Davis.

 

Failure to install guardrail was not a ministerial act which waives immunity says Austin Court of Appeals

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The City of Austin v. Jennifer Frame, et al  03-15-00292-CV (Tex. App.- Austin, May 26th 2016)

This is a recreational use personal injury case where the Court of Appeals reversed the denial of the City’s plea to the jurisdiction and dismissed the case.

Rosales jumped the curb and drove onto a hike-and-bike trail. In so doing his vehicle and debris struck and killed Colonel Griffith and injured Pulido. The appellees (the estate and Pulido) sued the City for, among other things, failure to construct a guardrail or barrier for a known danger, which was allegedly a failure to carry out a ministerial act. The City filed a plea to the jurisdiction, which was denied. The City appealed.

The sole issue on appeal is whether the appellees’ allegations concern discretionary roadway design, as the City contends, or a negligent failure to implement a previously formulated policy, as the appellees contend. Texas courts have generally found that actions and decisions implicating social, economic, or political considerations are discretionary while those that do not involve these concerns are operational- or maintenance-level. The court analyzed the facts and policies alleged. It held that even if the City had a policy to fix identified hazards, “…it does not necessarily follow that the City’s failure to address this particular hazard was negligent policy implementation for which immunity is waived. The policy that the appellees describe does not mandate the construction of a guardrail or barrier with sufficient precision to make that action nondiscretionary…” “Rather, it requires the City to balance social and economic concerns and devise a plan to address each specific identified hazard. This demands a level of judgment…” which equates to discretionary actions.  Further, even if the City had made a specific decision to modify the area, “…immunity does not vanish where a governmental entity has decided to change the design of a public work but has not yet implemented that change.”  The plea should have been granted.

To read the opinion click here. Panel consists of Justices Puryear, Goodwin and Bourland. Memorandum opinion issued by Justice Bourland. Attorneys for Greg Griffith are Mr. Mike Davis and Mr. Sean E. Breen. Attorneys for Cheryl Burris are Mr. Mike Davis, Mr. Sean E. Breen and Virginia I. Hermosa. Attorneys for Diana Pulido are Mr. Mike Davis and Mr. Sean E. Breen. The City of Austin is represented by Ms. Chris Edwards.

Trial court properly declined to appoint condemnation commission before hearing plea to the jurisdiction says Texas Supreme Court

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In Re Lazy W District No. 1. , 15-0117 (Tex. May 27, 2016)

This original mandamus proceeding involves two governmental entities, one of which petitioned for condemnation of a water pipeline easement across the other’s land.

The Tarrant Regional Water District (“the Water District”) supplies water to some two million Texans across 11 counties. The Water District and the City of Dallas agreed to build a 150-mile pipeline to transport water owned by Dallas in Lake Palestine. LazyW District No. 1 is a municipal utility district which owns land over which an easement is necessary to run the pipeline. Politics exist behind the scene which the Court discussed but which is unnecessary for this summary. The Water District petitioned for condemnation in the district court. The district court appointed three special commissioners to determine the value of the proposed easement. When the Lazy W learned of the order it filed a plea to the jurisdiction, asserting its immunity as a governmental entity and requesting that the appointments be vacated and the petition dismissed. Normally, the trial court is not to interfere in the commissioners’ proceedings and does not become involved again until the commissioners file their award.  The district court vacated its appointment and declined to proceed with anything else before hearing and ruling on the plea. The Water District sought mandamus relief in the court of appeals. That court held that “the trial court was without jurisdiction to refuse to appoint special commissioners.” Lazy W appealed.

The Court went through Chapter 21 of the Property Code regarding condemnation and the procedures noting the administrative nature of the commission and the judicial appeal aspects of the court.  The Water District contended that the trial court cannot rule on the Lazy W’s plea to the jurisdiction until the commissioners issue their award.  However, the Court disagreed  holding “[s]ection 21.014 is certainly mandatory, but it is not restrictive. It requires the court to appoint commissioners, but it does not forbid any other action.” The Court went through different instances where it is proper to challenge the jurisdiction of the trial court to appoint commissioners. “Courts always have jurisdiction to determine their own jurisdiction.”  “We have never held that a trial court in a condemnation case is powerless to determine its own subject matter jurisdiction before appointing commissioners.” “We do not hold that a trial court must make an early ruling in every situation, only that the trial court did not abuse its discretion in determining to do so here.”  However, the Court was quick to add it expressed no view on whether the Lazy W is immune from suit and expressly declined to address that issue here.

If you would like to read this opinion click here. Chief Justice Hecht delivered the opinion of the Court. The docket page with attorney information is found here.

Texas Supreme Court holds the accommodation doctrine applies to groundwater leases

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Coyote Lake Ranch, LLC v City of Lubbock, 14-0572 (Tex. May 27, 2016)

This is a dispute over a groundwater lease owned by the City and whether the accommodation doctrine (which is founded in oil and gas law) applies. The Texas Supreme Court held that it does.

Coyote Lake Ranch is used primarily for agriculture, raising cattle, and recreational hunting. In 1953, the Ranch sold a groundwater lease to the City of Lubbock to help it combat a massive drought. In 2012, the City announced plans to increase water-extraction efforts on the Ranch, possibly drilling as many as 20 test wells. The Ranch objected noting that mowing or removing vegetation from the surface causes destructive wind erosion, exacerbated by cattle tromping over mowed paths. According to the Ranch, wind, drought, and grazing cattle prevent grass from growing back, particularly in the areas the City mowed. The trial court enjoined the City from further efforts to drill wells. The Court of Appeals reversed holding the accommodation doctrine did not apply.

An oil-and-gas lessee has an implied right to use the land but must exercise that right with due regard for the landowner’s rights. This is the accommodation doctrine. It has never before been extended to a groundwater lease. The Court analyzed the lease language and noted that the different interpretations presented by the parties provide extremes on both sides. The Ranches interpretation could severely restrict the City’s drilling activities if the City could only drill where the Ranch deemed appropriate. The City’s interpretation would mean it has an all but an absolute right to use the surface heedless of avoidable injury, although it must answer for damages caused to the surface. Going back to the concept of mineral separation interests the Court held the mineral and surface estates must exercise their respective rights with due regard for the other’s rights. After going through the history of the accommodation doctrine, the Court held the doctrine should be applied to groundwater leases. The Court then noted the injunction was too prohibitive, however, and remanded the case for further processing in the trial court.

Chief Justice Hecht delivered the opinion of the Court, in which Justice Green, Justice Johnson, Justice Guzman, Justice Devine and Justice Brown joined. Justice Boyd delivered a concurring opinion, in which Justice Willett and Justice Lehrmann joined.

 

Restaurant’s inverse condemnation claim for temporary and permanent decreased access permitted to go forward

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Jose Gerardo Padilla, et al v. Metropolitan Transit Authority of Harris County 14-14-00938-CV (Tex. App.- Houston, May 24th 2016)

This is an inverse condemnation case where the 14th Court of Appeals reversed the dismissal and remanded for trial.

Padilla’s restaurant was located on the southeast corner of an intersection. Metro contracted with HRT for construction of a five-mile extension of an existing light rail line, referred to as the North Line. The Contract admonished HRT not to use private property in the construction of the North Line or to engage in acts of negligence that would harm property owners along the route. According to Padilla, construction prevented customers from accessing the restaurant property and blocked all of the entrances and exits for months at a time. Additionally, the new configuration resulted in permanent restrictions on traffic movements in the area. Eventually, the restaurant closed. Pedilla filed an inverse condemnation suit. Metro filed a plea to the jurisdiction which the trial court granted.

The court held not all damage caused by government construction projects is compensable. Property owners may not recover for injuries sustained in common with the community such as damage from noise, dust, increased traffic, etc. However, damages peculiar to a property owner, such as impaired access, are not barred by the concept of community injury. To be successful the plaintiff must show there has been: (1) a total but temporary restriction of access; (2) a partial but permanent restriction of access; or (3) a temporary limited restriction of access brought about by an illegal activity or one that is negligently performed or unduly delayed. According to Metro, although the construction caused occasional disruptions along the route, HRT always made alternative arrangements so customers could access the restaurant. Therefore, this was nothing more than the type of non-compensable inconveniences associated with all government transportation projects. However, Padilla testified access was blocked entirely for months at a time. The court held Padilla’s affidavit was not conclusory and was competent evidence because he provided background facts to explain the basis of his statements. It created a fact issue. Additionally, to avoid the element of Metro’s intent to harm property, Metro asserted the acts were carried out by a contractor. Therefore, Metro lacked intent under a takings analysis. The court held a governmental entity cannot avoid its constitutional obligation to compensate private property owners simply by proving that the project was carried out by contractors. As a result, the trial court erred when it granted the plea. The case is reversed and remanded.

To read the opinion click here Panel consists of Justices Boyce, Busby and Brown. Justice Busby issued the opinion. Attorney for Jose Gerardo Padilla, Giovanna Padilla and Houston Best Foods & Services, LLC d/b/a Doneraki Fulton is Frederick D. Junkin. Attorney for Metropolitan Transit Authority of Harris County is Michael Sydow, Sr.

TxDOT immune from accidentally letting two directions of traffic into the same lane says Beaumont Court of Appeals

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Jeanette Hagelskaer v. Texas Department of Transportation 09-15-00279-CV (Tex. App. – Beaumont, April 21, 2016).

This is an appeal from the granting of TxDOT’s plea to the jurisdiction where the Beaumont Court of Appeals modified the judgment but affirmed the granting of the plea. This is a personal injury case where a bicyclist was in a TxDOT detour lane and was hit by oncoming traffic when TxDOT employees accidentally let both directions of traffic into the same lane.

TXDOT repaired the northbound shoulder of a two-lane roadway. In the course of its repairs, TXDOT closed the northbound lane of FM 1486, and allowed traffic on the road to alternate the use of the southbound lane. TXDOT stationed flaggers at each end of the project to control the use of the southbound lane who utilized radios to coordinate traffic. Hagelskaer, travelling south, approached the construction zone on her bicycle with a group of other cyclists.  As the cyclists were passing through the construction zone, Hagelskaer managed to safely pass one northbound vehicle but she encountered a second, injuring her. Hagelskaer sued asserting, among other things, that TxDOT allowed both directions of traffic to share the same land and the equipment in the closed lane prevented the second vehicle from being able to safely pass her (essentially creating a bottleneck effect). The trial court granted TxDOT’s plea to the jurisdiction, which she appealed.

The court first held the Texas Tort Claims Act (“TTCA”) does not waiver immunity for the negligent handling of traffic flow. There was also no nexus between TxDOT’s “maintainer” equipment which was off to the side of the roadway and the accident. The evidence before the court demonstrated that Hagelskaer and the truck driver’s shared use of a single lane of traffic by accident caused Hagelskaer’s injuries, not the lanes of travel created by TxDOT’s equipment. The maintainer merely furnished the condition that made the accident possible. Hagelskaer never alleged that the maintainer being used in the northbound lane was being operated in a negligent manner. TXDOT’s equipment was in the closed lane, and did not protrude into the southbound lane being used by the traffic.  Hagelskaer has also not shown that the Tort Claims Act contains a waiver for activity that is based on decisions involving a lane closure and decisions by government employees that allowed commuter traffic to share a single lane. Next, under a premise defect theory, Hagelskaer alleged TxDOT was aware of the danger it created and did not warn her the dangers present in her lane of travel. However, the court held such facts cannot be classified as a premise or special defect. The defect on which Hagelskaer premises her claim concerns the existence of equipment and vehicles on a lane of the road closed for construction which is merely a detour. Additionally, the existence of oncoming traffic in a single lane was not unexpected from Hagelskaer’s point of view.  Further, even if the condition were a premise defect, TxDOT had no duty to warn her of a condition of which she was already aware (i.e. she avoided the first vehicle in the lane).  TxDOT cross-appealed noting the dismissal should be with prejudice. After going through the pleading record, the court agreed Hagelskaer had an opportunity to replead and chose not to do so. As a result, the court should have granted the plea with prejudice.

If you would like to read this opinion click here. Chief Justice McKeithen, Justice Horton and Justice Johnson. Opinion by Justice Horton.  The attorneys listed for TxDOT are Susan Desmarais Bonnen, Richard Mason and John Johnson.  The attorney listed for Hagelskaer is Jonathan Bleyer.