Brown Water Marine Service, Inc. and Hugh T. Chapman v. Aransas County Navigation District No. 1

• Court: Court of Appeals of Texas
• Decided: April 24, 2008
• Docket: 13-07-00055-CV
• Status: Published

Opinion

NUMBER 13-07-055-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

BROWN WATER MARINE SERVICE, INC. Appellants, AND HUGH T. CHAPMAN,

v.

ARANSAS COUNTY NAVIGATION DISTRICT NO. 1, Appellee.

On appeal from the 36th District Court of Aransas County, Texas.

MEMORANDUM OPINION

Before Justices Yañez, Benavides, and Vela Memorandum Opinion by Justice Vela

This is an appeal from a summary judgment order granted in favor of appellee,

Aransas County Navigation District No.1 (“the District”) and against appellants, Brown

Water Marine Services, Inc. and Hugh T. Chapman (collectively “Brown Water”). The

District’s motion asked for judgment on the issues of governmental immunity, inverse condemnation, and breach of contract. The trial court granted the District’s traditional and

no-evidence motions for summary judgment. The three issues raised by Brown Water on

appeal are (1) whether the trial court erred by granting summary judgment on the District’s

claim of immunity, (2) whether the trial court erred in granting summary judgment on Brown

Water’s inverse condemnation claim, and (3) whether the trial court erred in granting

summary judgment on the contract claim. We affirm.

I. Background

In 1990, the District began leasing to Brown Water a submerged portion of the

District’s Cove Harbor property in Rockport, Texas. While negotiating a renewal of this

lease in 2004, the District granted Brown Water a right of first refusal to lease Lots 78 and

79 of the Cove Harbor property. This was accomplished by letter, dated December 8,

2004. These lots have bulkheads and adjoin Brown Water’s submerged lease.

In January of 2006, the District leased Lots 78 and 79 to an outside company

without first offering Brown Water the opportunity to refuse to lease the lots. Brown Water

sued the District for breach of contract, wrongful taking, and inverse condemnation.

The 36th District Court of Aransas County, Texas, granted Brown Water a

temporary injunction effective until the end of 2006, enjoining the District from entering into

any lease longer than six-months with a party other than Brown Water. In January of 2007,

the trial court granted the District’s traditional and no-evidence motions for summary

judgment.

II. Standard of Review

2 On appeal, a summary judgment is reviewed de novo. Provident Life & Acc. Ins.

Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). A summary judgment can only be upheld

on grounds expressly set forth in the written motion. Roberts v. Sw. Tex. Methodist Hosp.,

811 S.W.2d 141, 144-45 (Tex. App.–San Antonio 1991, writ denied). Summary judgment

is appropriate when there is no genuine issue of material fact and judgment should be

granted in favor of the movant as a matter of law. KPMG v. Harrison County Hous. Fin.

Corp., 988 S.W.2d 746, 748 (Tex. 1999). Governmental immunity can properly be

asserted in a motion for summary judgment. See Harris County v. Sykes, 136 S.W.3d 635,

638 (Tex. 2004). When a trial court grants a summary judgment without stating specific

grounds, the summary judgment must be affirmed if any of the grounds are meritorious.

Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001).

III. Analysis

A . GOVERNMENTAL IMMUNITY

Brown Water claims that the trial court erred in granting summary judgment in favor

of the District on the issue of governmental immunity, arguing that its agreement with the

District for a right of first refusal in leasing Lots 78 and 79 was a maritime contract, and the

application of maritime law defeats the District’s immunity defense.

The District is a unit of government created in the manner prescribed in the Texas

Water Code. TEX . W ATER CODE ANN . § 62.021 (Vernon 2004). A navigation district is

considered a local governmental entity. TEX . LOC . GOV’T CODE ANN . § 271.151(3)(c)

(Vernon 2005). While a governmental entity waives its immunity from liability when it

enters into a contract, it does not waive its immunity from suit. Tooke v. City of Mexia, 197

3 S.W.3d 325, 332 (Tex. 2006). A waiver of immunity must be clear and unambiguous. Id.

at 332-33. Brown Water concedes that its contract is barred by immunity if Texas law

applies.1 It urges this Court to recognize the agreement between the parties as a maritime

contract and analyze the District’s immunity defense under federal law. Brown Water

claims that under federal law, the District does not enjoy immunity.

The determinative issue is whether the agreement to grant Brown Water a right of

first refusal is a maritime contract. If it is not a maritime contract, we will apply Texas law,

which supports the District’s claim of immunity. If it is, we examine the propriety of the

additional grounds urged in the District’s motions for summary judgment because the trial

court granted both Brown Water’s traditional and no-evidence motions for summary

B. MARITIME CONTRACTS

Brown Water makes two claims. First, it claims that the right of first refusal was a

contract for wharfage and, therefore, a maritime contract. Second, Brown Water urges that

the right of first refusal for lots 78 and 79 was related to a lease of adjacent submerged

lands. Because the adjacent submerged lands were under navigable waters, the right of

first refusal was a maritime contract. The Fifth Circuit defines a maritime contract as "a

contract relating to a ship . . . or to commerce or navigation on navigable waters.” J.A.R.,

Inc. v. M/V Lady Lucille, 963 F.2d 96, 98 (5th Cir. 1992) (quoting Thurmond v. Delta Well

1 W e note that neither party raises the applicability of the provision of the Texas Local Governm ent Code providing for a waiver of im m unity if there is a "written contract stating the essential term s of the agreem ent for providing goods or services to the local governm ental entity." T EX . L O C . G O V ’T C OD E A N N . § 271.151(2) (Vernon 2005). Section 271.151(2) of the local governm ent code does not apply because the claim at issue here does not concern goods or services. Rather, it involves an interest in real property. See City of San Antonio v. Reed S. Lehman Grain, Ltd., No. 04-04-00930-CV, 2007 W L 752197, at *2 (Tex. App.–San Antonio Mar. 14, 2007, pet. denied) (noting that an easem ent dedication contract conveyed only an interest in real property and is not an agreem ent for providing goods and services).

4 Surveyors, 836 F.2d 952, 954 (5th Cir. 1988) (citation omitted)). Agreements that are

merely ancillary to maritime contracts are not maritime contracts. See Theriot v. Bay

Drilling Corp., 783 F.2d 527, 538 (5th Cir.1986) (noting that there must be a direct and

proximate juridical link between the contract and operating a ship to attach maritime

character); Walter v. Marine Office of Am., 537 F.2d 89, 94 (5th Cir. 1976) (noting that

contracts relating to the construction of vessels are ordinarily not considered maritime

contracts); Carter-Green-Redd, Inc. v. U.S.S. Cabot Found, 756 F. Supp. 276, 279 (E.D.

La. 1991) (noting that an option contract and a right of first refusal in leasing a vessel did

not constitute a maritime contract because the option and the right did not directly relate

to navigation or operating a vessel). In Carter-Green-Redd, the Louisiana district court

reiterated that, in order for a contract to be a maritime contract, the subject matter must

directly relate to the operation of a vessel and navigation. Id. at 278. There, the court said

that it was a contract made on land to be performed on land and that there was no need

or justification to resort to the law of the sea. Id.

Wharfage is the use of a wharf furnished in the ordinary course of navigation. The

James T. Furber, 129 F. 808, 810 (D.C. Me. 1904). As a general rule, the lease of a pier

or wharf is not a maritime contract unless the lease is tied to a provision of wharfage for

a specific vessel. Simon v. Marine Terminals Corp., 882 F.2d 1435, 1441 (9th Cir. 1989).

There is a distinct difference between a claim for wharfage and a claim for rent of a wharf.

See id. at 1441. A claim relating to wharfage is a maritime contract. See id. A contract

for a lease of real property is not a maritime contract. See Bd. of Comm’rs of The Orleans

Levee Dist. v. M/V Belle of Orleans, 439 F. Supp. 2d 1178, 1200 (S.D. Ala. 2006).

5 In this case, Lots 78 and 79 have bulkheads; the docks on its lots adjoin submerged

lands, and a lessee could readily use the docks for loading and unloading. A lessee could

also choose to utilize this property in a number of other ways. In fact, the summary

judgment evidence presented by the District was that Brown Water intended to put its

office on the property in which it claimed a right of first refusal. The lease here was not for

the use of a particular vessel. The contemplated use of the property went beyond that of

tying off boats.

Brown Water claims that its right of first refusal relates to maritime activity through

the lease of maritime property. However, the agreement provides that if the District

chooses to lease Lots 78 and 79, it must first give Brown Water the opportunity to either

refuse to lease the property or lease the property at the market rate. The right of first

refusal, on its face, does not relate to maritime law. Further, Brown Water does not hold

a contract with the District to service ships on navigable waters. It merely holds a right to

refuse a lease or further negotiate with the District for such lease. Under these

circumstances, the right of first refusal is too far removed from maritime activity to abandon

Texas law for maritime law.

Brown Water’s right of first refusal does not directly relate to navigable waters or

ships; it relates to a lease. We will not construe this agreement as a maritime contract

based upon speculative or potential uses of a potential lessee. The agreement to grant

Brown Water the right of first refusal in leasing Lots 78 and 79 was not a maritime contract.

Under Texas law, the District is immune from Brown Water’s breach of contract suit

because it is a governmental entity. There was no waiver. Brown Water’s first issue is

overruled.

6 C. INVERSE CONDEMNATION

Brown Water contends that the trial court erred in granting summary judgment in

favor of the District on the issue of inverse condemnation. It attempts to circumvent the

District’s immunity from a breach of contract suit by contending that the District deprived

it of a property interest—the right of first refusal—without compensation and due course

of law.

Sovereign immunity bars a breach-of-contract claim, but it does not shield a

governmental entity from a takings clause action for compensation. Gen. Servs. Comm'n

v. Little-Tex Insulation Co., Inc., 39 S.W.3d 591, 598 (Tex. 2001).

To show a takings under article I, section 17, of the Texas Constitution, Brown

Water "must show that a governmental actor acted intentionally to take or damage property

for a public use." State v. Holland, 221 S.W.3d 639, 643 (Tex. 2007) (citing Little-Tex, 39

S.W.3d at 598). Whether particular facts are enough to constitute a "taking" is a question

of law. Little-Tex Insulation Co., Inc., 39 S.W.3d at 598.

Importantly, the State may "wear two hats." Id. at 599. The State may act as a

party to a contract and as sovereign. Id. The State, by acting within a color of right to take

or withhold property in a contractual situation, may also act as a private citizen and not

under any sovereign powers. Id.; see also Holland, 221 S.W.3d at 643-44 (wherein the

State was acting in its contractual capacity when it used a plaintiff’s patent; accordingly,

the State was immune from suit because it lacked the requisite intent to take under its

eminent domain powers). The absence of an express contract between the State and the

opposing party, or uncertainties about the existence of their implied contract, are

7 immaterial when determining the capacity in which the State is acting. Holland, 221

S.W.3d at 643.

The District was acting in its contractual capacity when dealing with Brown Water.

Whether the parties actually formed a contract or not, the District dealt with Brown Water

in a contractual setting. Their dealings resulted in an apparent agreement to grant Brown

Water a right of first refusal in leasing Lots 78 and 79. Similar to the State’s action in

Holland, the District lacked the requisite intent to take under its eminent domain powers

when it failed to give Brown Water its right of first refusal. There was also no evidence that

the District intentionally performed acts resulting in a taking of property for public use.

There was no taking on the part of the District in this case. We overrule Brown Water’s

second issue.

IV. Disposition

We hold that the agreement to grant Brown Water a right of first refusal was not a

maritime contract. Under applicable Texas law, the District is immune from Brown Water’s

breach of contract suit. Because the District is immune from Brown Water’s breach of

contract suit, this Court need not rule on the trial court’s granting of summary judgment on

the issue of breach of contract. TEX . R. APP. P. 47.1.

We further hold that the District did not act under its eminent domain powers when

it deprived Brown Water of its right of first refusal. The District dealt with Brown Water in

a contractual capacity and thus lacked the necessary intent to perform a taking under the

Texas Constitution. It is unnecessary for the Court to address Brown Water’s third issue

as it is not dispositive. See TEX . R. APP. P. 47.1.

8 We overrule Brown Water’s issues and affirm the trial court’s granting of summary

judgment in favor of the District on the issues of immunity and inverse condemnation.

ROSE VELA Justice

Memorandum Opinion delivered and filed this 24th day of April, 2008.