Brazoria County, Texas v. Basin Credit Consultants, Inc. D/B/A Powers & Parker, and Universal Surety of America

• Court: Court of Appeals of Texas
• Decided: September 18, 2002
• Docket: 07-01-00304-CV
• Status: Published

Opinion

NO. 07-01-0304-CV

IN THE COURT OF APPEALS

FOR THE SEVENTH DISTRICT OF TEXAS

AT AMARILLO

PANEL E

SEPTEMBER 18, 2002 ______________________________

BRAZORIA COUNTY, TEXAS,

Appellant

v.

BASIN CREDIT CONSULTANTS, INC. D/B/A POWERS & PARKER,

Appellee _________________________________

FROM THE 239TH DISTRICT COURT OF BRAZORIA COUNTY;

NO. 4082*JG98; HON. J. RAY GAYLE, III, PRESIDING _______________________________

Before QUINN and JOHNSON, JJ., and BOYD, SJ. 1

Brazoria County (Brazoria) appeals from a final judgment awarding Basin Credit

Consultants, Inc. d/b/a Powers & Parker (Parker) damages, interest and attorney’s fees.

Brazoria initially sued Parker to recover damages to County Road 59. Parker had been

granted a permit by Brazoria to operate heavily loaded vehicles upon the roadway, and,

in doing so, Parker allegedly damaged it. This resulted in the county revoking the permit

and filing the above mentioned suit. In turn, Parker counterclaimed for breach of contract,

1 John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by assignment. TEX. GOV’T CO DE AN N. §75.0 02(a )(1) (V erno n Su pp. 2002 ). the wrongful taking of property, and “deprivation of property based on equitable estoppel.”

On appeal, Brazoria argues that the trial court erred in refusing to grant the county a

directed verdict on the counterclaims of Parker and in submitting issue four wherein the

jury was asked to determine whether the permit was revoked “without just cause.”2 We

reverse.

Issue One — Directed Verdict

Brazoria contends, through its first issue, that it “should have been granted [a

directed verdict] because the facts established as a matter of law that [it] was entitled to

judgment dismissing . . . [the] counterclaim[s].” This is allegedly so because the “heavy

load permit was a revocable license subject to summary revocation . . . rather than a

contract.” And, because the permit could be summarily revoked, Parker “was not entitled

to recovery based on a contract theory of wrongful or unjust revocation . . . .” Finally,

Brazoria also contends that it was entitled to a directed verdict because it revoked the

permit “due to its concern for road damage and public safety.” We sustain the issue.

In addressing the dispute, we first consider whether suit against Brazoria could have

been founded, in theory, either upon breach of contract or revocation without just cause.

And, in considering that issue, we note that there exists a distinction between a permit and

franchise or contract issued by a governmental entity. The former, i.e., a permit, is not a

contract, Trevino & Gonzalez Co. v. R.F. Muller Co., 949 S.W.2d 39, 42 (Tex. App. --San

Antonio 1997, no writ), but rather a grant of authority to do that which would otherwise be

unlawful. Harris County v. Shepperd, 156 Tex. 18, 291 S.W.2d 721, 726 (1956) (quoting

2 To this issue, the jury answered “yes.” That answer served as the basis for awarding Parker $30 ,000 in dam age s, attorney’s fees , and interes t.

2 Payne v. Massey, 145 Tex. 237, 196 S.W.2d 493 (1946)). It confers a right or power which

does not exist without it. Id. And, whether the document constitutes a permit, as opposed

to a contract or franchise, depends upon whether it affects conduct which the

governmental entity is authorized to regulate via its police power. Johnson v. City of

Austin, 674 S.W.2d 894, 897 (Tex. App.--Austin 1984, no writ) (noting that a license or

permit “has the purpose of regulation under the police power”).

Next, that the State has the authority to create and maintain public roads and

regulate traffic thereon via its police power is clear. Furthermore, our legislature enacted

statutes incident to that power restricting the weight and size of vehicles which may be

operated upon public roadways. See e.g. TEX. TRANSP . CODE ANN . §621.101 (Vernon

Supp. 2002). So too did it enact statutes vesting governmental entities with the power to

free members of the traveling public from those restrictions. See e.g., §623.011. And, one

of those entities granted that authority is a county. Id. §623.018 (Vernon 1999). That is,

a county may grant others permission to operate oversized and overweight vehicles on

county surfaces other than state highways and public roads within the “territory of a

municipality,” and it does this through the issuance of a permit. Id. Consequently, when

a county allows one to operate a vehicle over roads when the vehicle exceeds applicable

weight limits, it is acting within its police power to not only regulate the usage of those

roads but also to allow the recipient to do that which otherwise would be illegal. Given this,

the grant of authority contemplated by §623.018 of the Texas Transportation Code likens

not to a contract but to a license (or permit) as that term is described in Johnson.

3 Here, Parker desired to operate overweight vehicles upon County Road 59. It

legally could not do so without permission from Brazoria. So, it sought and obtained that

permission. In acceding to Parker’s request (something the county could do under the

auspices of §623.018 of the Transportation Code), the county was not only regulating the

usage of the roads within its jurisdiction but also allowing Parker to do that which was

otherwise illegal. Consequently, the document received by Parker did not evince a contract

but rather a permit as described in Johnson. And, being a permit, as opposed to a

contract, it did not vest Parker with contractual rights upon which a claim of breached

contract could be founded. R.F. Muller Co., 949 S.W.2d at 42 (recognizing that since the

construction permit was not a contract, “there can be no breach of contract”).

Next, authority holds that permits may be revoked by the issuing party. Leach v.

Coleman, 188 S.W.2d 220, 225-26 (Tex. Civ. App.--Austin 1945, writ ref’d w.o.m.);

Mahaney v. City of Cisco, 248 S.W. 420, 422-23 (Tex. Civ. App.--Fort Worth 1922, writ

dism’d w.o.j.). Indeed, the power to revoke is inherent in the license or permit itself.3

Mahaney, 248 S.W. at 422-23 (quoting 19 R. C. L. §272). Moreover, that power cannot

be hindered or limited through contract. Newson v. City of Galveston, 76 Tex. 559, 13

S.W. 368, 369 (1890) (stating that the “police power possessed by such [municipal]

corporations cannot be fettered by contracts, but must be left free to be exercised at all

times, whether in conferring or withdrawing privileges once conferred”); Mahaney, 248

S.W. at 422-23 (quoting 19 R. C. L. §272). Nonetheless, in revoking a license or permit,

the entity may not act capriciously, arbitrarily, or unreasonably. Coleman, 188 S.W.2d at

3 W e note that the perm it at issue con tained a pro vision stating that the cou nty “retain[ed] the righ t to revo ke [it] by verbal notification . . . .”

4 225-26; Mahaney, 248 S.W. at 422-23. In other words, it must have a reasonable basis

for its decision. And, protecting the public welfare or good is such a basis. See Newson,

13 S.W. at 369 (stating that the privilege may be withdrawn “whenever the public good

require[s] it”). Finally, a governmental decision made sans reasonable basis exposes the

entity to legal action. See Mahaney, 248 S.W. at 423 (stating that “[w]hile the conclusions

above . . . require us to affirm . . ., yet if plaintiff upon a hearing on the merits can show that

the action of the city commissioners was arbitrary, unreasonable, or tyrannical and is

discriminatory against the appellant, a different case would be presented than the one at

bar”).4

From the foregoing, we must conclude that Brazoria was not subject to suit founded

upon breached contract. We, however, do not agree with the general proposition that the

power to revoke insulated the county from all claims. Again, it may not act arbitrarily, and

allegations that it did are cognizable in Texas courts. See id. Yet, that does not end our

discussion of the first issue. Now we must assess whether Brazoria was entitled to a

directed verdict on the issue of wrongful revocation.

As previously mentioned, the State clearly has the police power to regulate traffic

upon public roads. That counties, such as Brazoria, also have this power in situations

involving the operation of overweight and oversize vehicles upon county roads, is equally

clear. See TEX. TRANSP . CODE ANN . §623.018(a) (Vernon 1999) (so delegating that power

to counties). Nor is it disputed that the condition of County Road 59 deteriorated during

the period in which Parker was allowed to drive its overweight vehicles on it. Indeed, in

4 W e do not addres s the nature of the legal action or particular remedies available. Ne ithe r topic is encompassed within the issues Brazoria presents.

5 answering question one, the jury said “yes” when asked if “Powers and Parker’s operations

in using the road from June 1997 until March of 1998 cause[d] damage to” that particular

byway, and Parker does not contest this finding.5 Similarly undisputed is the evidence

illustrating that Brazoria believed the road to be deteriorating as Parker’s vehicles passed

over it. Given this and as a matter of law, it had a reasonable basis to revoke the permit,

and its decision to do so could not be interpreted as unreasonable, capricious, or “without

just cause.”

As stated in City of San Antonio v. Zogheib, 129 Tex. 141, 101 S.W.2d 539 (1937),

the issue is not whether the governmental entity “acted without what the jurors deemed fair,

solid, and substantial cause in denying the permit . . . .” Id. at 542. Nor was it within the

province of the jury to determine whether Brazoria was correct in attributing the

deterioration to Parker’s vehicles. See id. (stating that “it could [not] be determined by the

jurors’ opinion that no traffic congestion would be created by the operation of the filling

station at that point”). This is so because via §623.018 of the Texas Transportation Code,

the power was vested in Brazoria “and not elsewhere to determine whether a traffic hazard

[was] . . . created by the . . . operation which [it] should prevent in the interest of safety or

for other reasons.” Id. So, irrespective of whether evidence appears of record “upon which

reasonable minds might have differed as to the wisdom or justice . . . [in revoking] the

5 W e note that the jury answered “no” whe n ask ed if the “negligence,” if any, of Parker was “a prox imate cau se o f any dam age s . . . .” This answer does not conflict with that given in response to issue one because evidence appears of record indicating that the road was poorly constructed or maintained by Brazoria. Thus, the jury could ha ve found that while the ope ration of Park er’s trucks ca use d da m age to Co unty Road 59, the damage was not proximately caused by a breach of duty imposed upon or misconduct of Parker. And, since the answers to the two issues could be so construed, they are not fatally con flicting. See Huber v . Ryan, 627 S.W .2d 145, 145-46 (T ex. 1981) (holding that answ ers to jury issues are not fatally con flicting when they ca n rea son ably be reco nciled ).

6 permit . . . there is none that [Brazoria] did not honestly believe from the facts that a hazard

[was] . . . created from the operation of the [trucks] that it was [its] duty to prevent.” Id.

And, because there is no evidence which indicates that Brazoria did not honestly have

such a belief, the issue regarding whether the revocation was improper should not have

been submitted to the jury. Id. Thus, the trial court erred in refusing to grant Brazoria a

directed verdict upon Parker’s claim of wrongful revocation.

The judgment of the trial court is reversed to the extent that it awards Parker

damages, attorney’s fees, and interest against Brazoria. We also render judgment that

Parker recover nothing upon its counterclaim against the county. See TEX . R. APP . P.

43.2(c) (stating that the court of appeals may reverse the trial court’s judgment in whole or

part and render the judgment that the trial court should have rendered).

Brian Quinn Justice

Do not publish.