City immune from attorney’s fee under declaratory judgment claims says 4th Court of Appeals.

 

The City of San Antonio v. The Rogers Shavano Ranch, Ltd., et al, 04-13-00623-CV (Tex. App. – San Antonio, February 19, 2014)

This is a limited scope opinion on whether a plaintiff can recover attorney’s fees under the Uniform Declaratory Judgment Act (“UDJA”) for claims brought under the vested rights provision of Chapter 245 of the Texas Local Government Code.  The 4th Court of Appeals held they could.

The developers sought declarations that either a water contract or a development sewer report constituted an “original application for permit,” under Chapter 245 thereby vesting their rights and preventing application of future ordinances and regulations. In addition, the developers sought attorney’s fees under the UDJA. The City filed a plea to the jurisdiction asserting it retains sovereign immunity for the attorney’s fee claims which the trial court denied. The City appealed.

Citing to the Texas Supreme Court’s holding in Tex. Dep’t of Transp. v. Sefzik, 355 S.W.3d 618 (Tex. 2011), the San Antonio Court of Appeals noted that sovereign immunity is waived under the UDJA only for claims challenging an ordinance, not for claims challenging or seeking the construction of another statute, law, or written instrument. The court pointed out some inconsistency under Sefzik with the language of the UDJ , but held that Sefzik “is the more recent pronouncement, and we are bound by its holding.”  The court went further ins stating that under Sefzik and the Heinrich line of cases, even if another statute authorized declaratory relief against a City, that is not a clear and unambiguous waiver for attorney’s fees under the UDJA.  This is a recently developing area of law where the UDJA application is being limited only to claims challenging the validity of an ordinance and that the local governmental entity retains immunity for all other UDJA claims. Further, if another statute authorizes a UDJA action against an entity, that does not waive immunity from attorney’s fees, since only acts challenging ordinances can.  The 4th Court in this case, then held that the award of attorney’s fees is also redundant since the attorney’s fee claims are “incidental to [the] central theory of relief.”  Citing to Jackson v. State Office of Admin. Hearings, 351 S.W.3d 290, 301 (Tex. 2011) the court held that such incidental claims do not waive immunity for the awarding of fees. This essentially means that if the statute authorizing the initial claim, in this case Chapter 245, does not authorize attorney’s fees, then the UDJA cannot be used to create such an award. If the initial statute does authorize such fees, then they are recoverable under the UDJA. As a result, the trial court erred in denying the City’s plea.

If you would like to read this opinion click here. Panel: Chief Justice Stone, Justices Angelini and Barnard.  Opinion by Chief Justice Stone. The attorneys listed for the City of San Antonio are Dan Pozza, Joe R. Hinojosa, and Paul D. Barkhurst.   The attorney listed for Rogers Shavano Ranch is S. Mark Murray.