Charles J. Hughes v. Tom Green County

• Court: Court of Appeals of Texas
• Decided: June 17, 2016
• Docket: 03-16-00132-CV
• Status: Published

Opinion

ACCEPTED 03-16-00132-CV 11216005 THIRD COURT OF APPEALS AUSTIN, TEXAS 6/17/2016 8:42:04 PM JEFFREY D. KYLE CLERK NO. 03-16-00132-CV

FILED IN 3rd COURT OF APPEALS IN THE AUSTIN, TEXAS THIRD COURT OF APPEALS 6/17/2016 8:42:04 PM JEFFREY D. KYLE AT AUSTIN, TEXAS Clerk

CHARLES J. HUGHES, Appellant v.

TOM GREEN COUNTY, Appellee

APPELLEE’S BRIEF

JAMES DAVID WALKER P. O. Box 41 Milano, Texas 76556 SBOT 20706000 Phone: (512) 636-9520 Email: walker@2appeal.com ATTORNEY FOR APPELLEE TOM GREEN COUNTY

ORAL ARGUMENT REQUESTED IDENTITY OF PARTIES AND COUNSEL

Appellant’s Brief lists Appellee Tom Green County’s trial counsel.

Tom Green County is represented on appeal by:

James David Walker P. O. Box 41 Milano, Texas 76556 SBOT 20706000 Phone: (512) 636-9520 Email: walker@2appeal.com

1 TABLE OF CONTENTS

INDEX OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Standard of Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Authority of Commissioners Court. . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Governmental Immunity - General Principles.. . . . . . . . . . . . . . . . . . 23 Waiver of Governmental Immunity - Legislative Control. . . . . . . . . 25 Waiver of Governmental Immunity - The Lawson Plurality Exception. . . . . . . . . . . . . . . . . . . . . . . . 32

Lawson Issues Summarized. . . . . . . . . . . . . . . . . . . . . . . 32 Court Not Required to Adopt Lawson. . . . . . . . . . . . . . . . . . . . 35 Reata Limitation on Immunity Has No Application to Lawson Exception. . . . . . . . . . . . 38 Any Recovery Should Be Limited To A Reata Offset.. . . . . . . . . . . . . . 48 Alternatively Lawson Should Not Be Applied To A Contract Executed in 1994. . . . . . . . . . . . . . . . . . . 50 Record Does Not Support A Lawson Waiver. . . . . . . . . . . . . . 51 The record does not implicate the Reata immunity exception. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 The record does not implicate the Lawson immunity waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Waiver of Governmental Immunity - By Conduct. . . . . . . . . . . . . . . 59

PRAYER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

2 INDEX OF AUTHORITIES

Cases

A. I. Divestitures, Inc. v. Texas Comm'n on Envtl. Quality, 2016 WL 3136850 (Tex.App.–Austin 2016, no. pet. h.). . . . . . . . . . . . . . . . . . . . . . . . . 39, 40, 43

Aledo ISD v. Choctaw Properties, L.L.C., 17 S.W.3d 260 (Tex.App.–Waco 2000, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Anderson v. Wood, 152 S.W.2d 1084 (Tex. 1941). . . . . . . . . . . . . . . . . . . . 21

Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547 (Tex. 2000). . . . . . . . . . . . 20

Brown & Gay Eng'g, Inc. v. Olivares, 461 S.W.3d 117 (Tex. 2015). . . . . . 25

Catalina Dev., Inc. v. County of El Paso, 121 S.W.3d 704 (Tex. 2003). . . 19, 23, 27

City of Carrollton v. Singer, 232 S.W.3d 790 (Tex. App.–Fort Worth 2007, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 47, 48

City of Dallas v. Albert, 354 S.W.3d 368 (Tex. 2011). . . . . . . . . . . . . . . . . 41

City of McKinney v. Hank's Rest. Group, L.P., 412 S.W.3d 102 (Tex.App.–Dallas 2013, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 53, 63

City of New Braunfels v. Carowest Land, Ltd., 432 S.W.3d 501 (Tex.App.–Austin 2014, no pet.).. . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 47, 63

Employees Ret. Sys. of Texas v. Putnam, LLC, 294 S.W.3d 309 (Tex.App.–Austin 2009, no pet.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40, 48-50

Federal Sign v. TSU., 951 S.W.2d 401 (Tex. 1997). . . . . . . . . . . . . . . . . . . 48

3 Firemen's Ins. Co. of Newark, N.J. v. Bd. of Regents of Univ. of Texas Sys., 909 S.W.2d 540 (Tex.App.–Austin 1995, writ denied). . . . . . . . . . . . . . . . 21

Harris County v. Sykes, 136 S.W.3d 635 (Tex. 2004). . . . . . . . . . . . . . . . . 24

Hays County v. Hays County Water Planning Partnership, 106 S.W.3d 349 (Tex.App.–Austin 2003, pet. den.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Hydroscience Techs., Inc. v. Hydroscience, Inc., 401 S.W.3d 783 (Tex.App.–Dallas 2013, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Jonah Water Special Util. Dist. v. White, 2009 WL 2837649 (Tex.App.–Austin 2009, pet. struck).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Labrado v. Univ. of Texas at El Paso, 2012 WL 43385 (Tex.App.–Austin 2012, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31, 62, 63

Leach v. Texas Tech Univ., 335 S.W.3d 386 (Tex.App.–Amarillo 2011, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Reata Const. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. 2006). . . 37, 48, 53, 54

Rusk State Hosp. v. Black, 392 S.W.3d 88 (Tex. 2012). . . . . . . . . . . . . . . . 20

Smith v. City of Blanco, 2009 WL 3230836 (Tex.App.–Austin 2009, no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64, 65

Smith v. Lutz, 149 S.W.3d 752 (Tex.App.–Austin 2004, no pet.). . . . . . . . 54

Tarrant County v. Smith, 81 S.W.2d 537 (Tex.Civ.App.–Fort Worth 1935, writ ref'd). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Texas A & M Univ.-Kingsville v. Lawson, 87 S.W.3d 518 (Tex. 2002). . . . 29, 32, 33, 36, 38, 44, 51

4 Texas A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835 (Tex. 2007).. . . . 31, 43, 44

Texas Dept. of Health v. Neal, 2011 WL 1744966 (Tex.App.–Austin 2011, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 34, 35, 40, 43, 46

Texas Nat. Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849 (Tex. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 28, 30, 36, 47, 66

Texas Southern University v. State Street Bank & Trust Co., 212 S.W.3d 893 (Tex.App.–Hou. [1st Dist.] 2007, pet. denied). . . . . . . . . . . . . . . . . . . . . . . 63

Thomas v. Long, 207 S.W.3d 334 (Tex. 2006). . . . . . . . . . . . . . . . . . . . . . . 21

Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006).. . . . . . . . . . . . . . 24, 34

Travis County v. Pelzel & Assocs., 77 S.W.3d 246 (Tex. 2002).. . . 26, 27, 31

Travis County v. Rogers, 2015 WL 4718726 (Tex.App.–Austin 2015, no pet.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 46

TXU Energy Retail Co. L.L.C. v. Fort Bend ISD., 472 S.W.3d 462 (Tex.App.–Dallas 2015, no pet.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Webb County v. Khaledi Props., 2013 WL 3871060 (Tex.App.–San Antonio 2013, no pet.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692 (Tex. 2003). . . . . . . 24

Statutes

Tex. Civ. Prac. & Rem. Code § 154.073.. . . . . . . . . . . . . . . . . . . . . . . . 60, 61

Tex. Civ. Prac. & Rem. Code §107.001-.005. . . . . . . . . . . . . . . . . . . . . . . . 30

5 Tex. Gov't Code § 311.034. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Tex. Loc. Gov't Code § 81.006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Tex. Loc. Gov’t Code § 81.001.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

6 STATEMENT OF FACTS

Appellant Hughes appeals the grant of a plea to the jurisdiction

[Appendix1]. Hughes sued Appellee Tom Green County alleging breach of a

1994 agreement, the Mutual Partial Assignments [Appendix2]. Hughes

complains that the County breached the Mutual Partial Assignments (MPA)

by failing to name the County’s library in honor of Hughes’ family. He seeks

damages in the amount of at least $3,000,000 plus attorney's fees.

[Appendix3]

The MPA was executed during the course of prior litigation (the SMU

litigation). Defendant's Exhibit 1 (CR3:4) contains a copy of every pleading

and any other document filed in the SMU litigation. (RR2:10)

Because this is an appeal from the grant of a plea to the jurisdiction, the

initial focus is on the facts pleaded by Hughes. His pleading is attached as

Appendix3. Hughes pleads:

*that the will of Hughes’ late uncle devised the residuary of the

uncle’s estate to the County.

*that in 1994 SMU filed suit seeking release of the will’s

restrictions on the use of a gift made to it by the uncle’s will.

7 *that the County intervened in the SMU litigation and sought a

declaration that the residue of such gift to SMU (the amount not

needed to satisfy the purpose of the gift) belonged to the County.

*that Hughes and others (the Hughes group) thereafter intervened

in the SMU litigation and sought a declaration that the residuary

gift to the County had lapsed and that, as a consequence, the

residue of the gift to SMU belonged to the uncle’s heirs.1

*that the SMU litigation court ordered the parties to mediation.

Prior to mediation, the MPA was executed.2 Hughes pleads that the

signatories to the MPA were authorized to sign by all required authorities.

(CR:808) SMU was not a party to the MPA.

By the MPA, the Hughes group assigned to the County "50% of the net

proceeds they actually receive from [the SMU litigation]." Likewise, the

1 Hughes was one of at least three heirs participating in the SMU litigation. In the current litigation, Hughes is the lone plaintiff. Thus, for the sake of simplicity the argument will in some respects ignore other heirs. 2 Hughes’ brief asserts that the MPA was signed at mediation. (Brief:3) Although the timing does not seem to have any significance, the record does not support the brief’s assertion. The MPA is not dated. However, Hughes pleads, “Prior to mediation, Tom Green County and the Heirs-at-Law entered an agreement titled Mutual Partial Assignments . . . .” (CR:808) Hughes acknowledges that the MPA was signed before the other agreements. (Brief:14-15)

8 County thereby assigned to the Hughes group "50% of the net proceeds it

actually receives from [the SMU litigation]." Similarly, the MPA provides

that “[t]hese mutual assignments are irrevocable and are intended to be a

mutual exchange of 50% of the respective interests of the parties hereto in

any recovery under said cause against SMU and any other adverse parties

who may be joined in the cause by mutual agreement of the parties hereto.”

The MPA expressly disavows any intent to extinguish claims. It

provides in relevant part: "[T]his document is in no way intended to eliminate

or reduce in any fashion the cause of action, claims, or rights held by the

heirs-at-law or the County." (emphasis added).

The MPA also includes the following: "In further consideration of this

matter, the County agrees to name the main county library, in honor of

Duwain E. Hughes, Jr., and/or Frances Crews Hughes, if the commissioners

consider the County's ultimate recovery in the cause to be substantial enough

for such recognition." Duwain and Frances Hughes are herein referenced as

“the Hughes family.”

Thereafter, during mediation, the parties executed a document

captioned Settlement Agreement. [Appendix4] The Settlement Agreement

9 provided: that SMU would pay $1,000,000 to the County and the other

parties to the suit (excepting one party); that SMU would obtain appropriate

relief as to the uncle’s will; and that all parties would dismiss their claims

with prejudice.

Thereafter, the parties executed a document captioned Compromise and

Settlement and Release of All Claims (the Compromise Agreement).

(CR:671) The Compromise Agreement [Appendix5] provides that the

Settlement Agreement is “further reduced to writing in this agreement.”

The County disputes Hughes’ assertion that the Compromise

Agreement “does not provide for any releases between the County and the

Hughes heirs.” (Brief:4) The Compromise Agreement summarizes the claims

asserted by SMU, the County, and the Hughes group and provides that by the

Settlement Agreement the parties agreed to a “complete and final

compromise and settlement of such suit and all of such disputes.” Similarly,

the trial court signed a Final Judgment [Appendix6] which recites that “all

matters in controversy between the parties which is the subject matter of this

suit have been fully and finally agreed to and settled.”

The Settlement Agreement, the Compromise Agreement, and the Final

10 Judgment make no mention of the MPA. Hughes pleads that the County and

the Hughes group evenly split (50-50) the $1,000,000 paid by SMU.

(CR:809)

Hughes pleads that he accepted the SMU settlement during mediation

because the County’s representatives had stated that “the County’s portion of

the SMU’s offer would be substantial enough to warrant naming the Central

Library as contemplated in the [MPA].”

Hughes further pleads that the County’s commissioners court met in

open session on July 9, 1994 and “considered the ultimate recovery in the

lawsuit to be substantial enough and ratified the [MPA].” (CR:809) He also

pleads that the commissioners court ratified “the separate agreement settling

claims against SMU and dismissing the lawsuit.” (CR:809)

Hughes pleads that the County’s commissioners court met on March 1,

2011 and passed a resolution which named the library the “Stephens Central

Library” and which expressly provided that the County’s recovery in the

SMU litigation is not substantial enough to name the library in honor of the

Hughes family. (CR:610)

Hughes sued the County, asserting three causes of action: (1) breach of

11 the MPA (by failing to name the library in honor of Hughes' family)

(CR:812); (2) an equitable claim captioned "money had and received,"

alleging that the County accepted the benefits of the MPA and unjustly

retains the SMU settlement funds (CR:813); and (3) a declaratory judgment

action asserting a violation of the Open Meetings Act and seeking to have the

March 11, 2011 resolution naming the library declared void and

unenforceable (CR:811).

The trial court granted the County’s plea to the jurisdiction and

dismissed for lack of subject matter jurisdiction the claims arising out of or

pertaining to the MPA. (CR:833)

12 SUMMARY OF THE ARGUMENT

Appellant Hughes sued the County seeking damages for breach of the

library naming provision set out in the Mutual Partial Assignments (MPA).

Hughes and the County executed the MPA during the course of prior

litigation, being the SMU litigation.

There is a dispute over performance of the library naming provision.

The MPA provides that the County will name the County’s library in honor

of the Hughes family - if the County’s commissioners determine that the

County’s recovery in prior litigation, the SMU litigation, is substantial

enough to name the library in honor of the Hughes family. The County

contends that even had the 1994 commissioners court determined that the

recovery was substantial enough to name the library for the Hughes family

(disputed), the 2011 commissioners court nevertheless had discretion to make

its own determination (a contrary determination) when it named the new

library in honor of the Stephens family.

In an effort to avoid the expense of trial, the County pleaded

governmental immunity. The trial court granted the plea to the jurisdiction

and dismissed for lack of subject matter jurisdiction the claims arising out of

13 or pertaining to the MPA.

Hughes argues that he pleaded two grounds for waiver of immunity

from suit: waiver of immunity for breach of a settlement agreement under

application of the Lawson case and waiver of immunity by conduct.

Hughes failed to demonstrate that immunity was waived under

application of the Lawson case. In Lawson, a Supreme Court plurality

opined: “[W]hen a governmental entity is exposed to suit because of a waiver

of immunity, it cannot nullify that waiver by settling the claim with an

agreement on which it cannot be sued.”

Thus, the Lawson rule provides that immunity is waived on a breach of

contract claim if three elements are satisfied:

1- a claim was asserted against the governmental entity;

2- the entity was thereby exposed to suit because of a waiver of immunity;

and,

3-the claim was settled by the agreement made the basis of suit.

Hughes argues that the County was “exposed to suit” (County lacked

immunity) in the SMU litigation because it voluntarily intervened in the

SMU litigation. Hughes would thereby invoke the Reata case’s voluntary

14 litigation exception to immunity.

However, in A. I. Divestitures this Court recognized that the judicially

promulgated Reata immunity exception has no application to Lawson

immunity waiver. The Lawson waiver rule applies only to agreements which

settle claims as to which immunity has been statutorily waived.

In any event, the record does not support an application of Reata -

because the County sought no damages in the SMU litigation. Likewise,

Reata has no application because vis-a-vis Hughes the County’s claims were

merely defensive. Hughes intervened after the County intervened.

Additionally, the Lawson immunity waiver can have no application

because the MPA did not settle any claim - much less a claim asserted by

Hughes against the County. In the SMU litigation Hughes asserted no claim

against the County.

Additionally, even if Reata's judicially implemented limitation on the

contours of immunity were engrafted onto the Lawson waiver rule, and even

if Lawson otherwise had application, then logic and equity weigh in favor of

likewise engrafting and applying Reata's limited scope of jurisdiction. If the

County's voluntary intervention in the SMU litigation, or its conduct,

15 triggered a waiver of immunity (disputed), then the trial court did not

thereby acquire jurisdiction over Hughes' claim for monetary relief against

the County in excess of an amount sufficient to offset the County's recovery

(if any). Alternatively, the 2002 Lawson plurality’s immunity waiver should

not be applied to a contract signed in 1994.

Hughes failed to demonstrate that the County waived immunity by its

conduct. Hughes relies on alleged representations which as a matter of law

cannot be considered.

Even if such allegations could be considered, this court has repeatedly

declined to apply a waiver by conduct exception to immunity. Even if the

waiver by conduct theory were viable, the facts pleaded by Hughes do not

support an equitable waiver of immunity.

The County is not alleged to have made any representations to Hughes

concerning immunity. Hughes may have presumed that the County was

obligated to name the new library in honor of his family. However, a

misunderstanding of the law does not justify an equitable waiver of

immunity.

Here, the County asserts immunity in an effort to avoid the expense of

16 trial. The pleaded facts do not demonstrate that the County made promises

which it intended to break.

Here, there is a good-faith dispute over performance of the library

naming provision: whether the 1994 commissioners court found that the

SMU litigation recovery was substantial enough to name the library in honor

of Hughes' family (disputed); and, even if it had, whether in the course of

naming the new library the 2011 commissioners court is somehow precluded

from making its own determination (a contrary determination).

There is no showing that Hughes exercised his statutory remedy:

seeking legislative authority to sue the County. For that additional reason,

there is no basis for an equitable waiver of the County’s governmental

17 ARGUMENT

Background

There is a dispute over performance of the library naming provision set

out in the Mutual Partial Assignments (MPA). The County denies that the

1994 commissioners court determined that the SMU litigation recovery was

substantial enough to name the library in honor of Hughes’ family. (CR:616)

Even if the 1994 commissioners court had made such a determination, the

2011 commissioners court was not thereby precluded from making its own

determination (a contrary determination) when naming the new library.

In this regard, the issue is not whether the SMU litigation recovery was

substantial enough to name the library in honor the Hughes’ family. The

issue is whether the County’s commissioners court considers the recovery

substantial enough to name the library for the Hughes family. The contract

which Hughes claims to have been breached, the MPA [Appendix2],

provides that “the County agrees to name the main county library, in honor of

Duwain E. Hughes, Jr., and/or Frances Crews Hughes, if the commissioners

consider the County's ultimate recovery in the cause to be substantial enough

for such recognition." (emphasis added).

18 The County contends that the 2011 commissioners court had authority

to determine the issue of whether the recovery was substantial enough to

name the library in honor of Hughes' family. See Catalina Dev., Inc. v.

County of El Paso, 121 S.W.3d 704, 706 (Tex. 2003) (commissioners court

not bound by policy decisions of their predecessors); TXU Energy Retail Co.

L.L.C. v. Fort Bend ISD., 472 S.W.3d 462, 466 (Tex.App.–Dallas 2015, no

pet.) (rejecting implied contract theory); Texas Dept. of Health v. Neal, 2011

WL 1744966, at *5 (Tex.App.–Austin 2011, pet. denied) (rejecting doctrine

of equitable estoppel).

Hughes alleges that the 2011 commissioners court made its

determination in violation of the Open Meetings Act. However, even if the

2011 determination were set aside, the commissioners court can make a new

determination.

In an effort to avoid the expense of trial, the County pleaded immunity

from liability and immunity from suit (CR:612) and filed a plea to the

jurisdiction (CR:651-677). The trial court granted the plea to the jurisdiction

and dismissed for lack of subject matter jurisdiction the claims arising out of

or pertaining to the MPA. (CR:833)

19 Standard of Review

Issues of immunity from suit, ripeness, and standing are issues of

subject-matter jurisdiction that may be raised for the first time on

interlocutory appeal. Rusk State Hosp. v. Black, 392 S.W.3d 88, 94 (Tex.

2012). A court deciding a plea to the jurisdiction is not required to look

solely to the pleadings but may consider evidence and must do so when

necessary to resolve the jurisdictional issues raised. Bland Indep. Sch. Dist. v.

Blue, 34 S.W.3d 547, 555 (Tex. 2000).

Whether a pleader has alleged facts that affirmatively demonstrate a

trial court's subject matter jurisdiction, or whether undisputed evidence of

jurisdictional facts establishes a trial court's jurisdiction, is a question of law

reviewed de novo. City of Carrollton v. Singer, 232 S.W.3d 790, 794 (Tex.

App.–Fort Worth 2007, pet. denied). If the pleadings affirmatively negate the

existence of jurisdiction, the plea may be granted without giving the claimant

an opportunity to amend. City of McKinney v. Hank's Rest. Group, L.P., 412

S.W.3d 102, 110 (Tex.App.–Dallas 2013, no pet.).

In a jurisdictional challenge, the court is bound neither by the legal

conclusions nor by any illogical factual conclusions that Plaintiffs draw from

20 the facts pleaded. Firemen's Ins. Co. of Newark, N.J. v. Bd. of Regents of

Univ. of Texas Sys., 909 S.W.2d 540, 542 (Tex.App.–Austin 1995, writ

denied); see Aledo ISD v. Choctaw Properties, L.L.C., 17 S.W.3d 260, 262

(Tex.App.–Waco 2000, no pet.) (in review of ruling on a plea to the

jurisdiction, we are not bound by legal conclusions nor by any illogical

factual conclusions drawn from the facts pled).

A trial court is not required to deny an otherwise meritorious plea to the

jurisdiction or a motion for summary judgment based on a jurisdictional

challenge concerning some claims because the trial court has jurisdiction

over other claims. Thomas v. Long, 207 S.W.3d 334, 339 (Tex. 2006).

Authority of Commissioners Court

The commissioners court is the general business and contracting

agency of the county, and it alone has authority to make contracts binding on

the county, unless otherwise specifically provided by statute. Anderson v.

Wood, 152 S.W.2d 1084, 1085 (Tex. 1941). “The members of the

commissioners court are the county judge and the county commissioners.”

Texas Local Government Code § 81.001(a). Three members generally

constitute a quorum for conducting county business. Tex. Loc. Gov't Code

21 Ann. § 81.006(a).

The commissioners court is a court of record and speaks through its

official minutes. Hays County v. Hays County Water Planning Partnership,

106 S.W.3d 349, 360-361 (Tex.App.–Austin 2003, pet. den.). The

commissioners' court does not act by the statement of one member thereof.

Id. No member of the commissioners court acting alone may bind the court or

the county. Id.. “[T]he individual commissioners have no authority to bind

the county by their separate action.” Canales v. Laughlin, 214 S.W.2d 451,

455 (Tex. 1948).

The commissioners court can act only as a body and when in an official

meeting. Hays County, 106 S.W.3d at 360-361. They meet as a court and

transact the county business in open session. Id. This requirement is not a

mere formality.

[T]he commissioners' court does not act by the statement of one member thereof at the local drug store and another at the county victuals emporium, etc. They meet as a court and transact the county business in open session. Such requirement is not formal. It is substantial, both that the members may have the benefit of the knowledge and opinions of the other members, as well as that the public may know when and where its affairs are being transacted.

22 Tarrant County v. Smith, 81 S.W.2d 537, 538 (Tex.Civ.App.–Fort Worth

1935, writ ref'd).

Governmental Immunity - General Principles

The doctrine of sovereign immunity serves to prevent governmental

entities from being bound by the policy decisions of their predecessors.

Catalina Development, Inc. v. County of El Paso, 121 S.W.3d 704, 706 (Tex.

2003); see Texas Nat. Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849,

854 (Tex. 2002) (sovereign immunity ensures that current policymakers are

neither bound by, nor held accountable for, policies underlying their

predecessors' long-term contracts). Although sovereign immunity furthers

important public policy goals, the courts need not justify its application.

In this Court's second Term, we acknowledged the common-law rule that “no state can be sued in her own courts without her consent, and then only in the manner indicated by that consent.” We gave no basis for this principle of sovereign immunity, perhaps because a rule then more than six centuries old which the United States Supreme Court would describe as “an established principle of jurisprudence in all civilized nations” required no justification, or perhaps because the reasons given for the rule had evolved over the centuries, from “the king can do no wrong”, to preserving the dignity of the state, to protecting state resources. The rule remains firmly established, and as it has come to be applied to the various governmental entities in this State, an important purpose is pragmatic: to shield the public from the

23 costs and consequences of improvident actions of their governments.

Tooke v. City of Mexia, 197 S.W.3d 325, 331-32 (Tex. 2006) (footnotes

omitted).

Technically, Texas counties enjoy the benefit of governmental

immunity - not sovereign immunity.

Courts often use the terms sovereign immunity and governmental immunity interchangeably. However, they involve two distinct concepts. Sovereign immunity refers to the State's immunity from suit and liability. In addition to protecting the State from liability, it also protects the various divisions of state government, including agencies, boards, hospitals, and universities. Governmental immunity, on the other hand, protects political subdivisions of the State, including counties, cities, and school districts.

Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 (Tex. 2003)

(authority omitted).

For purposes of this case, there is no meaningful distinction between

governmental immunity and sovereign immunity. Cases construing sovereign

immunity are equally relevant to governmental immunity. “Governmental

immunity operates like sovereign immunity to afford similar protection to

subdivisions of the State, including counties . . . .” Harris County v. Sykes,

24 136 S.W.3d 635, 638 (Tex. 2004).

Like sovereign immunity, governmental immunity encompasses both

immunity from suit and immunity from liability. Immunity from suit can be

challenged by a plea to the jurisdiction.

Referred to as governmental immunity when applied to the state's political subdivisions, Travis Cent. Appraisal Dist. v. Norman, 342 S.W.3d 54, 57-58 (Tex. 2011), sovereign immunity encompasses both immunity from suit and immunity from liability, Reata Constr. Corp., 197 S.W.3d at 374. Immunity from liability is an affirmative defense that bars enforcement of a judgment against a governmental entity, while immunity from suit bars suit against the entity altogether and may be raised in a plea to the jurisdiction. State v. Lueck, 290 S.W.3d 876, 880 (Tex. 2009); Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex. 2003).

Brown & Gay Eng'g, Inc. v. Olivares, 461 S.W.3d 117, 121 (Tex. 2015).

Waiver of Governmental Immunity - Legislative Control

The courts consistently hold that only the Legislature can waive a

county’s immunity from suit for breach of contract. The waiver must be

evidenced by statute or resolution and must be expressed by clear and

unambiguous language.

Express consent is required to show that immunity from suit has been waived. Thus in this case [involving a contract claim], Pelzel must establish consent to sue Travis County. Absent

25 consent, the trial court lacks jurisdiction.

A party may establish consent by statute or legislative resolution. The consent must be expressed by "clear and unambiguous language.”

***

Travis County v. Pelzel & Assocs., 77 S.W.3d 246, 248 (Tex. 2002)

(authority omitted); see Webb County v. Khaledi Props., 2013 WL 3871060

(Tex.App.–San Antonio 2013, no pet.) (waiver of a county's immunity from

suit for a claimed breach of contract requires a clear and unambiguous

expression of the Legislature, either by statute or resolution).

The requirement that a statutory waiver of immunity be clear and

unambiguous has been preserved by the legislature. Consider the following:

In order to preserve the legislature's interest in managing state fiscal matters through the appropriations process, a statute shall not be construed as a waiver of sovereign immunity unless the waiver is effected by clear and unambiguous language. In a statute, the use of “person,” as defined by Section 311.005 to include governmental entities, does not indicate legislative intent to waive sovereign immunity unless the context of the statute indicates no other reasonable construction. Statutory prerequisites to a suit, including the provision of notice, are jurisdictional requirements in all suits against a governmental entity.

Tex. Gov't Code § 311.034.

26 When a county contracts with a private party, it waives its immunity

from liability but not its immunity from suit.

When a governmental entity contracts with a private party, as Travis County has done here, it is liable on its contracts as if it were a private party. But a governmental entity does not waive immunity from suit simply by contracting with a private party.

Pelzel, 77 S.W.3d at 248 (authority omitted); see Catalina Dev., Inc. v.

County of El Paso, 121 S.W.3d 704, 706 (Tex. 2003) (contract formation, by

itself, is not sufficient to waive a governmental unit's immunity from suit).

Texas courts have consistently deferred to the Legislature to waive

immunity from suit.

We have consistently deferred to the Legislature to waive sovereign immunity from suit, because this allows the Legislature to protect its policymaking function. Indeed, in the Code Construction Act, the Legislature expressed its desire to maintain control over sovereign immunity [i]n order to preserve [its] interest in managing state fiscal matters through the appropriations process....; See Tex. Gov't Code § 311.034. Subjecting the government to liability may hamper governmental functions by shifting tax resources away from their intended purposes toward defending lawsuits and paying judgments. Accordingly, the Legislature is better suited than the courts to weigh the conflicting public policies associated with waiving immunity and exposing the government to increased liability, the burden of which the general public must ultimately bear.

27 Texas Nat. Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849, 854 (Tex.

2002) (authority omitted).

The Supreme Court has found contract claims to be especially

appropriate for such legislative deference.

In the contract-claims context, legislative control over sovereign immunity allows the Legislature to respond to changing conditions and revise existing agreements if doing so would benefit the public. Moreover, legislative control ensures that current policymakers are neither bound by, nor held accountable for, policies underlying their predecessors' long-term contracts.

Texas Nat. Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849, 854 (Tex.

Reasons for deferring to the Legislature in deciding whether to waive

sovereign immunity for contract claims have been summarized as follows:

the handling of contract claims against the government involves policy choices more complex than simply waiver of immunity, including whether to rely on administrative processes and what remedies to allow;

the government should not be kept from responding to changing conditions for the public welfare by prior policy decisions reflected in long-term or ill-considered obligations;

the claims process is tied to the appropriations process, and the priorities that guide the latter should also inform the former; and,

28 the Legislature is able to deal not only with these policy concerns but also with individual situations in deciding whether to waive immunity by resolution, cases by case, or by statute.

Texas A & M Univ.-Kingsville v. Lawson, 87 S.W.3d 518, 522 (Tex. 2002)

(plurality) (footnotes omitted).

Because waiver of immunity is a matter committed to the legislature,

the courts have been reluctant to apply a waiver-by-conduct theory: being

waiver based on the notion that a governmental entity can unilaterally waive

its governmental immunity through its own actions. This court has repeatedly

declined to apply such a theory, as is demonstrated by the following:

Carowest's notion that the City can unilaterally waive its governmental immunity through its own actions traces back to the Texas Supreme Court's now-infamous footnote in Federal Sign v. Texas Southern University intimating that "[T]here may be . . . circumstances where the State may waive its immunity by conduct other than simply executing a contract so that it is not always immune from suit when it contracts." But in the years since it decided Federal Sign, the [Texas Supreme Court] has clarified—and repeatedly emphasized—that it defers to the Legislature, not the actions of individual governmental units, to determine whether, when, and how sovereign or governmental immunity should be waived. In so doing, moreover, it has squarely rejected the notion that a governmental entity with authority to enter contracts, or an agent acting on its behalf, can contractually waive immunity from suit, as Carowest insists occurred here. It has similarly declined repeated requests to recognize a "waiver by conduct," and has never gone further than

29 its suggestion in Federal Sign that such a waiver might conceivably occur under some set of facts it has not yet seen. Similarly, in the absence of further guidance from the supreme court, this Court (at least in recent years) has consistently rejected requests that we recognize "waivers by conduct" under a variety of factual scenarios.

City of New Braunfels v. Carowest Land, Ltd., 432 S.W.3d 501, 521

(Tex.App.–Austin 2014, no pet.) (emphasis added).

Legislative control over the waiver of immunity from suit does not

mean that the State can freely breach contracts with private parties, or that the

State can use sovereign immunity as a shield to avoid paying for benefits the

State accepts under a contract. Texas Nat. Res. Conservation Com'n v.

IT-Davy, 74 S.W.3d 849, 854 (Tex. 2002). There is a statutory remedy. If a

party who contracts with the State feels aggrieved, the party can seek redress

by asking the Legislature to waive immunity from suit. Id., citing Tex. Civ.

Prac. & Rem. Code §107.001-.005.

Although the commissioners court has authority to enter into contracts

on behalf of a county, it does not have authority to waive the county’s

immunity from suit. IT-Davy, 74 S.W.3d at 858 (even though the TNRCC's

executive director had the authority to enter into the contract with IT-Davy

30 on the TNRCC's behalf, he did not have authority to, and thus did not, waive

the TNRCC's immunity from suit); Labrado v. Univ. of Texas at El Paso,

2012 WL 43385, at *3 (Tex.App.–Austin 2012, no pet.) (only the

Legislature, not contracting parties, may waive a governmental unit's

immunity).

A county does not waive its immunity by accepting the benefits of a

contract. See Texas A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840 (Tex.

2007) (the State does not waive its immunity from a breach-of-contract

action by accepting the benefits of a contract).

Likewise, a county does not waive immunity by seeking to comply

with the terms of a contract - even if the scope of performance required by

the contract is disputed. Pelzel, 77 S.W.3d at 252 (when a governmental unit

adjusts a contract price according to the contract's express terms, it does not,

by its conduct, waive immunity from suit, even if the propriety of that

adjustment is disputed).

31 Waiver of Governmental Immunity - The Lawson Plurality Exception

Lawson Issues Summarized

Hughes observes that he pleaded two grounds for waiver of immunity

from suit: waiver of immunity for breach of a settlement agreement under

application of the Lawson case and waiver of immunity by conduct. (Brief:7)

He argues: “The issue facing this Court is whether the County waived

immunity from suit for its breach of the Agreement – either by breaching a

settlement agreement under Lawson or by its conduct in breaching the

Agreement.” (Brief: 8) By “Agreement,” Hughes refers to the Mutual Partial

Assignments (MPA) which contains the library naming provision. (Brief:3)

This section will address the first issue (Lawson): waiver of immunity

for breach of a settlement agreement. Following that, the County will address

waiver by conduct.

Hughes relies on an immunity waiver theory applied by a plurality of

the Supreme Court in Texas A&M University-Kingsville v. Lawson, 87

S.W.3d 518 (Tex. 2002). In Lawson, the state university entered into an

agreement which settled Mr. Lawson’s Whistleblower claim - being a claim

32 as to which immunity had been statutorily waived. Mr. Lawson brought suit

for breach of the agreement.

Four judges (a plurality) concluded that the breach of contract claim

was not barred by immunity, ruling that the university had waived immunity

by entering into the settlement agreement. The Lawson plurality opined:

“[W]hen a governmental entity is exposed to suit because of a waiver of

immunity, it cannot nullify that waiver by settling the claim with an

agreement on which it cannot be sued.” Lawson, 87 S.W.3d at 521.

Hughes contends that the Mutual Partial Assignments (the source of the

library naming provision) settled a claim as to which immunity from suit had

been waived. In this regard, he argues that the County lost its immunity from

suit by voluntarily intervening in the SMU litigation (the Reata exception to

immunity). Hughes further contends that, under application of Lawson,

immunity from suit is as a consequence waived on his suit for breach of the

Mutual Partial Assignments (failure to name the library in honor of the

Hughes family).

The Lawson plurality’s theory of immunity waiver (Lawson waiver) is

not binding authority and should not be adopted. Even if adopted, the Court

33 can determine the scope of the Lawson waiver.

Even if the Mutual Partial Assignments (MPA) settled a claim on

which immunity did not apply (disputed), the nature of the claim settled by

the MPA is not the sort of claim which falls within the scope of Lawson

waiver (Lawson waiver applying to claims as to which immunity has been

statutorily waived).

Even if otherwise applicable, the scope of Lawson waiver should be

limited to allow suit for an offset (against any monetary recovery obtained by

the County) because that is the scope of the immunity exception applicable to

Hughes’ voluntary intervention theory (being the Reata exception to

immunity). Alternatively Lawson should not be applied to a contract

executed in 1994.

Immunity is the default position (it is presumed). It is the application of

an exception to immunity which must be justified. Neal, 2011 WL 1744966,

at *4 (the legislature has not waived immunity from suit over settlement

agreements generally). The application of immunity to settlement agreements

need not be justified. Cf. Tooke v. City of Mexia, 197 S.W.3d 325, 331-32

(Tex. 2006) (observing that sovereign immunity has long been recognized

34 and, as such, needs no justification - although it serves important purposes).

Court Not Required to Adopt Lawson

The Lawson plurality’s theory of immunity waiver is not binding

authority and should not be adopted. This Court is free to adopt or reject

Lawson waiver and, if adopted, is free to determine the scope of the waiver.

Because Lawson was decided by a plurality, and because the Lawson

exception has never been expressly adopted by a Supreme Court majority, the

Lawson exception to immunity has no precedential value. See Neal, 2011 WL

1744966, at *3 (Lawson is a plurality decision lacking precedential value).

This Court has applied Lawson. However, it is not clear whether the

Court applied Lawson because the Lawson rationale went unchallenged or

whether the court deemed itself bound to apply the rationale. See e.g. Travis

County v. Rogers, 2015 WL 4718726, at *5 n.1 (Tex.App.–Austin 2015, no

pet.). (Pemberton, J., concurring) (observing that the issue was not raised, but

Court of Appeals might be bound to apply Lawson).

The fact that the Supreme Court has remanded cases for courts to

consider the Lawson exception does not necessarily signal the Supreme

Court’s approval of the exception. It may simply signal a desire that the

35 courts of appeal have the first opportunity to determine whether, and the

extent to which, the exception should be applied.

The Lawson exception to immunity judicially intrudes into an area

which is delegated to the Legislature - waiver of sovereign immunity. See

Texas Nat. Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849, 854 (Tex.

2002) (we have consistently deferred to the Legislature to waive sovereign

immunity from suit).

This is nothing more than an ordinary contract dispute. Unless waived, the State retains its immunity from suit on a contract, whether the contract is for goods and services or a settlement agreement. We have repeatedly held that sovereign immunity in ordinary contract claims is an area best left to legislative judgment. See York, 871 S.W.2d at 177 (“[T]he waiver of governmental immunity is a matter addressed to the Legislature.”). Deference to the Legislature to determine sovereign immunity in ordinary breach-of-contract cases claiming waiver by conduct is founded on sound policy. See Fed. Sign, 951 S.W.2d at 413 (Hecht, J., concurring) (“There are compelling reasons for this Court to continue to defer to the Legislature.”). Yet today the plurality overrides those compelling reasons and concludes that although the Legislature has not chosen to waive sovereign immunity for this breach-of-contract claim, the University simply “may not” claim immunity in this case.

Lawson, 87 S.W.3d at 525-26 (Rodriguez, J., dissent).

In this regard, the question is not whether the Lawson exception

36 advances equitable or otherwise beneficial policy. The question is whether

the policy choices should be made by the courts or by the Legislature. Cf.

Reata Const. Corp. v. City of Dallas, 197 S.W.3d 371, 375 (Tex. 2006) (there

is tension between the concept of a governmental entity waiving its immunity

from suit by some action independent from the Legislature's waiving

immunity and the principle that only the Legislature can waive sovereign

The Lawson exception to immunity also ignores established law that a

suit for breach of a settlement agreement is independent of the settled claim.

The plurality concedes that the Legislature has not waived immunity for Lawson's breach-of-contract claim. Nevertheless, the plurality sidesteps recent precedent concerning sovereign immunity in breach-of-contract suits, wholly ignores established law that a suit for breach of a settlement agreement is independent of the settled claim, and erroneously concludes that the University may not assert immunity.

[T]he issue here is whether the State may assert sovereign immunity in an ordinary breach-of-contract case, and the answer to that question is decidedly “yes.” Lawson asserted a breach-of-contract claim against the University, and the State has sovereign immunity on that claim. When Lawson settled, he traded in his wrongful termination claims for a settlement contract, and, in addition to accepting $62,000, he accepted the

37 risk that the State could assert immunity if it breached the contract, just as all people who contract with the State accept that risk. Although such a risk might discourage some parties from contracting with the State, that risk has not daunted the Court before. See Pelzel, 77 S.W.3d at 252; IT-Davy, 74 S.W.3d at 856; Fed. Sign, 951 S.W.2d at 408. Moreover, those who settle for cash and receive payment before dismissing their suit take no risk that the State will assert immunity. Thus, contrary to the plurality's fears, only a handful of settlements in which the private party insists on executory provisions rather than only a cash settlement would be discouraged.

Lawson, 87 S.W.3d at 524-25 (Rodriguez, J., dissent).

Reata Limitation on Immunity Has No Application to Lawson Exception

Even if the Lawson rationale is adopted, this Court can determine the

scope of the Lawson waiver. In order to apply Lawson waiver to Hughes’

claim, the Court would need to expand the waiver beyond the narrow scope

to which it was applied by the Lawson plurality.

The Lawson plurality opined: “[W]hen a governmental entity is

exposed to suit because of a waiver of immunity, it cannot nullify that waiver

by settling the claim with an agreement on which it cannot be sued.” Lawson,

87 S.W.3d at 521 (plurality).

Thus, the Lawson rule provides that immunity is waived on a breach of

38 contract claim if three elements are satisfied:

2- the entity was thereby exposed to suit because of a waiver of immunity;

3-the claim was settled by the agreement made the basis of suit.

Even assuming that Hughes met the other two elements (disputed),

Hughes has not demonstrated that in the SMU litigation the County was

exposed to suit because of a waiver of immunity. Here, in an effort to

establish that immunity was waived on a claim allegedly settled by the MPA,

Hughes relies on Reata’s judicially created voluntary litigation exception to

However, this Court has declined to extend the Lawson waiver in the

manner advocated by Hughes. See A.I. Divestitures, Inc. v. Texas Comm'n on

Envtl. Quality, 2016 WL 3136850, at *8 (Tex.App.–Austin 2016, no. pet. h.)

(rejecting argument that the Reata exception to immunity will support an

application of Lawson waiver). A judicially created exception to immunity

will not support an application of Lawson.

The Lawson exception has no application - because even if the Mutual

39 Partial Assignments (MPA) settled a claim, it did not settle a claim for which

the legislature had waived immunity. See A.I. Divestitures, 2016 WL

3136850, at *8 (Lawson waiver is not implicated when there has been no

legislative waiver of the State's immunity). In Neal, this Court likewise

distinguished Lawson, holding as follows: “[T]he present case differs from

Lawson in a crucial respect: Lawson had a statutorily recognized claim (i.e .,

a claim for which the State had waived immunity) pending in the trial court

when he settled with the State.” 2011 WL 1744966, at *4.

The voluntary litigation theory (the Reata rule) relied on by Hughes

does not give rise to a statutory waiver of immunity. Instead, the voluntary

litigation theory gives rise to a limited judicial exception to immunity and, as

such, will not support application of a Lawson waiver.

Hughes argues that the County “voluntarily intervened in the SMU

litigation and had no grounds for asserting sovereign immunity as to Hughes’

claim in the SMU Litigation.” (Brief:8,10,14). He provides neither argument

nor authority. (CR:806).

However, voluntary litigation gives rise to a very limited exception to

immunity. See Employees Ret. Sys. of Texas v. Putnam, LLC, 294 S.W.3d

40 309, 325 (Tex.App.–Austin 2009, no pet.). In Putnam, this Court observed:

In Reata, the court held that when a governmental entity files a lawsuit or otherwise seeks affirmative relief, it waives immunity for connected, germane, and properly defensive counterclaims, but only to the extent those counterclaims offset the claims of the government entity. 197 S.W.3d at 377 (“Absent the Legislature's waiver of the City's immunity from suit, ... the trial court did not acquire jurisdiction over a claim for damages against the City in excess of damages sufficient to offset the City's recovery, if any.”).

Putnam, 294 S.W.3d at 324-25.

Technically, the Reata rule is not a rule of waiver - it is a judicially

implemented limitation on the contours of immunity (the extent to which

immunity will be applied). This distinction is illustrated by the following:

Although litigation actions of governmental entities underlay our decisions in Reata and similar cases, we did not hold that those actions effected waivers of immunity; rather, they were factors we considered in defining the contours of immunity. In other words, we have not, in Reata or other decisions, altered the principles that (1) the boundaries of sovereign immunity are determined by the judiciary, and (2) waivers of sovereign immunity or consent to sue governmental entities must generally be found in actions of the Legislature.

City of Dallas v. Albert, 354 S.W.3d 368, 374 (Tex. 2011) (authority

Because the Reata rule gives rise to a judicially implemented limitation

41 on the contours of immunity, its application to Lawson waiver is

inappropriate because, as noted, Lawson waiver is justified (if at all) by its

application to statutorily recognized claims (claims as to which the legislature

has waived immunity).

This Court recently held that the Reata voluntary litigation rule has no

application to Lawson waiver, holding as follows:

Relying on Reata Construction Corporation v. City of Dallas, A.I. asserts that by filing suit against A.I., the Commission waived immunity concerning any and all of A.I.'s potential defenses and potential offsets. See Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371, 374 (Tex.2006). Relying further on Texas A & M University–Kingsville v. Lawson, A.I. maintains that because the Commission agreed to settle the enforcement action, for which according to A.I. it had waived its immunity, it could not claim immunity from a suit alleging that it breached that settlement agreement. See Texas A & M Univ.-Kingsville v. Lawson, 87 S.W.3d 518, 520–23 (Tex.2002) (holding exception to sovereign immunity exists when suit alleges breach of agreement settling claim for which Legislature has waived State's immunity).

In this case there is no legislative waiver of the Commission's immunity such that applying immunity to A.I.'s suit for breach of an agreement settling the enforcement action would thwart the Legislature's policy judgments in waiving immunity in the first place. See Lawson, 87 S.W.3d at 521 (“[W]hen a governmental entity is exposed to suit because of a waiver of immunity, it

42 cannot nullify that waiver by settling the claim with an agreement on which it cannot be sued ... without defeating the purpose of the waiver in the first place.”). The Lawson exception to sovereign immunity is simply not implicated when there has been no legislative waiver of the State's immunity. A.I.'s breach of contract claim was barred by sovereign immunity, and the district court properly granted the Commission's plea to the jurisdiction as to that claim.

A. I. Divestitures, 2016 WL 3136850, at *8.

The Supreme Court has recognized that the Lawson rule creates a

“narrow exception.” See Texas A & M Univ. Sys. v. Koseoglu, 233 S.W.3d

835, 838 (Tex. 2007) (pleadings against Texas A & M did not fit the narrow

exception suggested by the plurality in Lawson). The Lawson exception

permits immunity to be disregarded only if the agreement settled a claim as to

which immunity is statutorily waived.

The rationale underlying Lawson provides that the legislature has

waived immunity on the claim so enforcement of an agreement settling the

claim preserves and perpetuates the statutory waiver. This court has

recognized that the Lawson plurality “found a waiver of immunity in the

situation at bar only because it concluded that the Legislature intended one.”

Neal, 2011 WL 1744966, *13 (emphasis added).

43 The key distinction - the Lawson plurality determined that immunity

was waived by the legislature and not by the courts. See Lawson, 87 S.W.3d

at 522 (once the Legislature has decided to waive immunity for a class of

claims, the inclusion of settlements within the waiver is consistent with that

decision); Tex. A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840 (Tex.

2007) (in Lawson, a plurality of this Court held a plaintiff's claim for breach

of an agreement settling his underlying Whistleblower Act claim was

encompassed within the Legislature's decision to waive immunity for

Whistleblower Act claims).

Both the Lawson plurality and dissent recognized the need to give

deference to the legislature’s role in waiving sovereign immunity. The

Lawson four-judge dissent opined that the plurality exception failed to give

due deference to the Legislature, as follows:

We have repeatedly held that sovereign immunity in ordinary contract claims is an area best left to legislative judgment. See York, 871 S.W.2d at 177 ("The waiver of governmental immunity is a matter addressed to the Legislature."). Deference to the Legislature to determine sovereign immunity in ordinary breach-of-contract cases claiming waiver by conduct is founded on sound policy. See Fed. Sign, 951 S.W.2d at 413 (Hecht, J., concurring) ("There are compelling reasons for this Court to continue to defer to the Legislature."). Yet today the plurality

44 overrides those compelling reasons and concludes that although the Legislature has not chosen to waive sovereign immunity for this breach-of-contract claim, the University simply "may not" claim immunity in this case.

Id. at 525 (Rodriguez, J., dissent).

The Lawson plurality recognized that the Legislature was due

deference but concluded that such deference was not abridged - because the

Lawson exception gives effect to a statutorily recognized claim, as follows:

Allowing suit against the government for breach of an agreement settling a claim for which immunity has been waived does not interfere with the Legislature's policy choices. On the contrary, having determined to allow suits on such claims and prescribed the available remedies, the Legislature must surely have considered -- indeed, hoped -- that claims would often be settled. If anything, for the government to be immune from the enforcement of such settlements would impair the purposes of the waiver by limiting its effectiveness in cases not tried to a final judgment.

Once the Legislature has decided to waive immunity for a class of claims, the inclusion of settlements within the waiver is consistent with that decision.

In resolving this issue, we have concluded that the dissent's rigid view of immunity from suit for breach of contract would impair the effectiveness of the legislative waiver of immunity expressed

45 in the Whistleblower Act by pressuring the government and some claimants to remain in litigation rather than settle.

Lawson, id. at 522-23 (plurality, emphasis added).

Enforcing settlements of claims which have not been statutorily

authorized denies due legislative deference and is inconsistent with the

policies recognized by both the Lawson plurality and the Lawson dissent. As

noted, this court has recognized that the Lawson plurality “found a waiver of

immunity in the situation at bar only because it concluded that the

Legislature intended one.” Neal, 2011 WL 1744966, *13 (emphasis added).

The following underscores the fact that Lawson’s application is limited

to claims on which immunity has been statutorily waived.

Where the Legislature has chosen to waive immunity as to a cause of action against government, government settles the claim, and then government allegedly breaches the settlement agreement and tries to invoke immunity as a bar to any claims for breach, Lawson holds that the immunity that would ordinarily bar the claims for breach (aside from some sort of independent legislative waiver) does not apply.

Rogers, 2015 WL 4718726, at *5 (Pemberton, J., concurring) (emphasis

added).

The Legislature is better suited than the courts to weigh the conflicting

46 public policies associated with waiving immunity and exposing the

government to increased liability, the burden of which the general public

must ultimately bear. IT-Davy, 74 S.W.3d at 854; City of New Braunfels v.

Carowest Land, Ltd., 432 S.W.3d 501, 521 (Tex.App.–Austin 2014, no pet.)

(the Texas Supreme Court has repeatedly emphasized that it defers to the

Legislature to determine whether, when, and how sovereign or governmental

immunity should be waived).

Hughes relies on City of Carrollton v. Singer, 232 S.W.3d 790

(Tex.App.–Fort Worth 2007, pet. den.). However, Singer is consistent with

Lawson's application to statutorily authorized claims.

In Singer, the court applied Lawson to an agreement settling an

eminent domain proceeding - in which proceeding the Singers asserted a

claim against the City alleging inadequate compensation for the City's

acquisition of their property, and for which the City would not be immune.

Singer, 232 S.W.3d at 800 (Tex. App.–Fort Worth 2007, pet. denied). The

Singer court observed that condemnation is a process created entirely by

statute. Id. at 797. The court held that the landowners settled a claim for

which the governmental entity's immunity is statutorily waived and that

47 enforcement of that settlement necessarily is included within that initial

waiver. Id. at 799-800.

Thus Singer is consistent with Lawson's limited application, being

application to the settlement of statutorily authorized claims. Because the

MPA did not settle a statutorily authorized claim, Lawson waiver should not

be applied.

Any Recovery Should Be Limited To A Reata Offset

Reata applies retrospectively. See Putnam, 294 S.W.3d at 325-26

(given that the Texas Supreme Court has seen fit to apply its decision in

Reata retrospectively, including to those cases pending on appeal at the time

Reata was issued, we see no reason not to do so in the present case as well).

The principles underlying Reata date back to at least 1943. See Reata, 197

S.W.3d at 377 (observing that Reata court merely applies principles

promulgated as early as 1943 in the Humble Oil case); cf. Federal Sign v.

TSU., 951 S.W.2d 401, 408 (Tex. 1997) (the three times this Court

considered sovereign immunity in the breach of contract context, we held that

the State is immune from suit arising from breach of contract suits).

48 If Reata’s judicially implemented limitation on the contours of

immunity is engrafted onto the Lawson waiver rule, then logic weighs in

favor of likewise engrafting and applying Reata’s limited scope of

jurisdiction: the trial court would not thereby acquire jurisdiction over a

claim for monetary relief against the governmental entity in excess of

damages sufficient to offset the governmental entity’s recovery, if any.

This Court has recognized the limited scope of jurisdiction imparted by

Reata:

In Reata, the court held that when a governmental entity files a lawsuit or otherwise seeks affirmative relief, it waives immunity for connected, germane, and properly defensive counterclaims, but only to the extent those counterclaims offset the claims of the government entity. 197 S.W.3d at 377 (“Absent the Legislature's waiver of the City's immunity from suit, ... the trial court did not acquire jurisdiction over a claim for damages against the City in excess of damages sufficient to offset the City's recovery, if any.”).

Putnam 294 S.W.3d at 324-25.

A contrary rule (applying an unlimited waiver of immunity) would

raise a disincentive for governmental entities to settle claims. If in the

absence of settlement governmental entities are (under operation of Reata)

exposed to a limited waiver of immunity (damages limited to an offset), but

49 by settling are exposed (under operation of Lawson) to an unlimited waiver

(and unlimited damages), then governmental entities are not likely to settle

claims. Fewer settlements means more litigation.

Hughes seeks damages in the amount of at least $3,000,000 plus

attorney’s fees. [Appendix3] If the County’s voluntary intervention in the

SMU litigation, or its conduct, triggered a waiver of immunity (disputed),

then the trial court did not thereby acquire jurisdiction over Hughes’ claim

for monetary relief against the County in excess of an amount sufficient to

offset the County’s recovery (if any).

Alternatively Lawson Should Not Be Applied To A Contract Executed in 1994

If it should be determined that Reata's judicially implemented

limitation on the contours of immunity (jurisdiction limited to an offset) is

inapplicable, then it would be contrary to public policy to apply the Lawson

waiver rule to the MPA. See Putnam, 294 S.W.3d at 325 (although Texas

Supreme Court decisions usually apply retrospectively, exceptions may be

recognized when considerations of fairness and policy dictate prospective

effect only).

50 The contract herein made the subject of suit, the MPA, was executed in

1994. The Lawson rule was not announced until 2002 and even then it was

supported only by a plurality. The rule is yet to be applied by a majority of

the Supreme Court.

The Lawson plurality supported its immunity waiver by entertaining a

presumption that a governmental entity calculates risk when entering into a

settlement agreement. The plurality observed that the governmental entity

trades unknowns for knowns, “being obligations that are more accurately

assessable.” Lawson, 87 S.W.3d at 522 ) (plurality). However, here, it cannot

be said that the risk (a Lawson immunity waiver) was known to the County in

1994.

Record Does Not Support A Lawson Waiver

As was demonstrated, the Lawson rule provides that immunity is

waived on a breach of contract claim if three elements are satisfied:

2- the entity was thereby exposed to suit because of a waiver of immunity;

3-the claim was settled by the agreement made the basis of suit.

51 Hughes argues that the County lost its immunity on SMU litigation

claims by voluntarily intervening in the SMU litigation (being the Reata

immunity exception). Hughes reasons that the Mutual Partial Assignments

(the source of the library naming provision) as a consequence settled a claim

as to which the County had no immunity (the Lawson immunity waiver).

However, even if this co-mingling of theories (Reata and Lawson) had

merit, the pleaded facts do not fit the theories. The County’s intervention in

the SMU litigation did not implicate the Reata immunity exception. Even if it

had, Lawson waiver would not be implicated because: (1) Hughes asserted no

claim against the County (as contrasted with a claim against SMU); and, (2)

the Mutual Partial Assignments (MPA) did not settle a claim.

The record does not implicate the Reata immunity exception. The

County’s intervention in the SMU litigation did not implicate the Reata

immunity exception (being the second Lawson element - “exposed to suit

because of waiver”).

The Reata exception has application only if the governmental entity

asserts a claim for damages. The Reata court held: "Once it asserts

affirmative claims for monetary recovery, the City must participate in the

52 litigation process as an ordinary litigant, save for the limitation that the City

continues to have immunity from affirmative damage claims against it for

monetary relief exceeding amounts necessary to offset the City's claims."

Reata, 197 S.W.3d at 377.

In contrast, a governmental entity's affirmative claim for declaratory

relief does not have any effect on the entity's immunity. City of McKinney v.

Hank's Rest. Group, L.P., 412 S.W.3d 102, 116 (Tex.App.–Dallas 2013, no

pet.).

Here, Hughes pleads that the County sought declaratory relief (“sought

a declaration”). (CR:807) Hughes thereby negated the claimed waiver of

immunity. The County’s intervention did not waive the County’s immunity

as to claims asserted against the County by Hughes (if any).

Additionally, the County’s intervention in the SMU litigation did not

implicate the Reata immunity exception because, as between the County and

Hughes, the County's SMU litigation claim was defensive. The Reata goal is

to provide the party sued an opportunity to assert defensive claims. See

Reata, 197 S.W.3d at 374 (where a state voluntarily files a suit and submits

its rights for judicial determination, the defense will be entitled to plead and

53 prove all matters properly defensive). The Reata court held that “it would be

fundamentally unfair to allow a governmental entity to assert affirmative

claims against a party while claiming it had immunity as to the party's claims

against it.” Reata, 197 S.W.3d at 375-76 (emphasis added).

Here however, as between the County and Hughes, in the SMU

litigation it was the County which stood in the defendant’s shoes. In this

regard, the County did not initiate litigation with Hughes. The County sued

SMU (by intervening in the pending suit).

If the County is deemed to have asserted a claim against Hughes

(disputed), the claim is defensive in nature and as such would not trigger the

Reata exception to immunity. Cf. Smith v. Lutz, 149 S.W.3d 752, 758

(Tex.App.–Austin 2004, no pet.) (since IT-Davy, this Court has only

recognized a waiver of immunity in contract cases when the State has first

sued the contracting party).

Hughes pleads that he intervened after the County had intervened.

(CR:808-809) Hughes thereby negated application of a waiver based on

voluntary litigation. As between the County and Hughes it was Hughes who

stood in the plaintiff’s shoes and, consequently, Hughes cannot invoke the

54 benefit of a voluntary litigation doctrine which is designed to afford fairness

to a defendant.

The record does not implicate the Lawson immunity waiver. Even if

Hughes had satisfied the second Lawson element (exposed to suit because of

waiver), under the facts pleaded the Lawson immunity exception would not

be implicated because Hughes failed to satisfy the first and third elements.

Element One: In the SMU litigation Hughes asserted no claim against the

County (as contrasted with a claim against SMU) and thus had no claim

against the County that could be deemed settled by the Mutual Partial

Assignments (MPA). Element Three: the MPA did not settle a claim - it was

the post-MPA agreement and judgment which settled claims.

The trial court found that the MPA is a “mutual settlement agreement.”

(CR:833) The meaning and intent of this finding is not clear. The trial court

erred as a matter of law if it thereby determined that the MPA settled a claim

asserted by Hughes against the County - the record conclusively negates such

a conclusion. The fact that the trial court granted the plea to the jurisdiction

implies that the court did not assign such a construction to the MPA.

In the SMU litigation Hughes asserted no claim against the County (as

55 contrasted with a claim against SMU) and thus had no claim against the

County that could be deemed settled by the MPA. In such litigation, Hughes

and the County each sought to establish ownership of assets which were

being enjoyed by SMU. Neither Hughes nor the County therein asserted a

claim against the other.

In this regard, Hughes pleads that the County sought “a declaration that

the residue of the gift to SMU belonged to the County Library.” (CR:807)

Hughes pleads that Hughes sought “a declaration that because of the lapse in

the gift of the residue to Tom Green County, the residue of the gift to SMU

belonged to [the uncle’s] heirs at law [the Hughes group].” (CR:808 -

emphasis added) Although the relief sought by Hughes and the County

conflicted in the sense that relief for one precluded relief for the other, the

claims were asserted against SMU.

Additionally, the MPA did not settle a claim. It was the post-MPA

agreements and judgment which settled claims. The MPA merely altered the

ownership structure of the claims asserted by Hughes and the County against

SMU.

By the MPA, the Hughes group assigned to the County "50% of the net

56 proceeds they actually receive from [the SMU litigation]." (CR:662-663)

Likewise, by the MPA the County assigned to the Hughes group "50% of the

net proceeds it actually receives from [the SMU litigation]."(CR:662-663)

Similarly, the MPA provides that “[t]hese mutual assignments are irrevocable

and are intended to be a mutual exchange of 50% of the respective interests

of the parties hereto in any recovery under said cause against SMU and any

other adverse parties who may be joined in the cause by mutual agreement of

the parties hereto.” (CR:664)

In this manner, the MPA merely transfers an interest in net proceeds.

The MPA expressly disavows any intent to extinguish claims, providing in

relevant part as follows: "[T]his document is in no way intended to eliminate

or reduce in any fashion the cause of action, claims, or rights held by the

heirs-at-law or the County." [Appendix2] (emphasis added).

Hughes reasons that any claim asserted by Hughes against the County

in the SMU litigation would still be viable if the MPA did not settle that

claim. However, as noted, Hughes did not assert a claim against the County.

In any event, the post-MPA agreements and judgment (not the MPA)

settled claims. The County disputes Hughes’ assertion that one of these post-

57 MPA agreements, the Compromise Agreement [Appendix 5], “does not

provide for any releases between the County and the Hughes heirs.” (Brief:4)

The SMU litigation claims were settled by the Settlement Agreement,

the Compromise Agreement, and the Final Judgment. The Compromise

Agreement [Appendix 5] summarizes the claims asserted by SMU, the

County, and the Hughes group and provides that by the Settlement

Agreement [Appendix 4] (another post-MPA agreement) the parties agreed to

a “complete and final compromise and settlement of such suit and all of such

disputes.” Similarly, the trial court signed a Final Judgment [Appendix 6]

which recites that “all matters in controversy between the parties which is the

subject matter of this suit have been fully and finally agreed to and settled.”

58 Waiver of Governmental Immunity - By Conduct

Hughes observes that he pleaded two grounds for waiver of immunity

from suit: (1) waiver of immunity for breach of a settlement agreement under

application of the Lawson case and (2) waiver of immunity by conduct.

(Brief:7) He argues: “The issue facing this Court is whether the County

waived immunity from suit for its breach of the Agreement – either by

breaching a settlement agreement under Lawson or by its conduct in

breaching the Agreement.” (Brief: 8) By “Agreement,” he refers to the

Mutual Partial Assignments (MPA) which contains the library naming

provision. (Brief:3)

This section will address the second issue: waiver of immunity by

conduct. This ground for waiver of immunity has special relevance to

Hughes’ equitable claim captioned "money had and received," alleging that

the County accepted the benefits of the MPA and unjustly retained SMU’s

settlement payment. (CR:813)

Hughes’ pleadings do not support a waiver of immunity by conduct.

Hughes pleads: “Tom Green County has waived sovereign immunity from

suit as a result of its conduct in entering into and then breaching the Mutual

59 Partial Assignments between Hughes and the County.” (CR:806)

Hughes pleads the following facts in support of waiver by conduct

exception to immunity:

18. At the time that the $1,000,000 settlement offer was made, and although he was already delegated authority, Timothy Weatherby contacted the other County Commissioners, and they all agreed that the County's $500,000 share was "significant" (as it constituted the largest single cash donation the County had ever received), should be accepted, and warranted naming the Central Tom Green County Library in honor of Duwain E. Hughes, Jr. or Frances Hughes Crews, as set forth in the Agreement. Id.

19. Because the Tom Green County representatives at the mediation stated that the County's portion of SMU's offer would be substantial enough to warrant naming the Central Library as contemplated in the Assignment Agreement, the Heirs-at-Law agreed to go along with Tom Green County and accepted SMU's offer. Id. Under the terms of the Assignment Agreement, the Heirs-at-Law and Tom Green County split those proceeds 50/50. Id.

(CR:808)

These statements alleged to have been made at mediation should not be

considered for any purpose. Use of the statements is barred by the mediation

privilege, being Tex. Civ. Prac. & Rem. Code § 154.073. This statute

provides that, subject to exceptions not shown applicable by the record,

a communication relating to the subject matter of any civil or

60 criminal dispute made by a participant in an alternative dispute resolution procedure, whether before or after the institution of formal judicial proceedings, is confidential, is not subject to disclosure, and may not be used as evidence against the participant in any judicial or administrative proceeding.

Tex. Civ. Prac. & Rem. Code Ann. § 154.073 (West).

Because the statute indicates such privileged information cannot be

disclosed or considered, it therefore follows it is a substantive defect that

cannot be waived by failing to obtain a ruling from the trial court.

Hydroscience Techs., Inc. v. Hydroscience, Inc., 401 S.W.3d 783, 793

(Tex.App.–Dallas 2013, pet. denied). Moreover, the County pleaded the

statute in bar of such representations. (CR:614)

The Hydroscience court observed that “[p]arties must not be allowed to

use evidence from mediation to dispute terms of a settlement agreement,

particularly years later.” 401 S.W.3d at 796. Here, the MPA [Appendix2]

(executed in 1994) expressly provides that the commissioners court will have

discretion to determine whether the recovery is substantial enough to name

the library in honor of the Hughes family. Hughes would use statements

allegedly made in mediation to establish that the County’s commissioners

court had no such discretion, notwithstanding the fact that Hughes pleads that

61 the 1994 commissioners court subsequently (after the statements were made)

ratified the MPA. (CR:809)

Additionally, statements made by commissioners outside the context of

an official meeting should not be considered. The County is not bound by

any such representations. See Tarrant County v. Smith, 81 S.W.2d 537, 538

(Tex. Civ. App.–Fort Worth 1935, writ ref'd) (the commissioners' court does

not act by the statement of one member thereof at the local drug store and

another at the county victuals emporium - they meet as a court and transact

the county business in open session); cf. Labrado, 2012 WL 43385, at *3

(only the Legislature, not contracting parties, may waive a governmental

unit's immunity).

In any event, this court has repeatedly declined to apply a waiver by

conduct exception to immunity, as is demonstrated by the following:

Carowest's notion that the City can unilaterally waive its governmental immunity through its own actions traces back to the Texas Supreme Court's now-infamous footnote in Federal Sign v. Texas Southern University intimating that "[T]here may be . . . circumstances where the State may waive its immunity by conduct other than simply executing a contract so that it is not always immune from suit when it contracts." But in the years since it decided Federal Sign, the [Texas Supreme Court] has clarified—and repeatedly emphasized—that it defers to the

62 Legislature, not the actions of individual governmental units, to determine whether, when, and how sovereign or governmental immunity should be waived. In so doing, moreover, it has squarely rejected the notion that a governmental entity with authority to enter contracts, or an agent acting on its behalf, can contractually waive immunity from suit, as Carowest insists occurred here. It has similarly declined repeated requests to recognize a "waiver by conduct," and has never gone further than its suggestion in Federal Sign that such a waiver might conceivably occur under some set of facts it has not yet seen. Similarly, in the absence of further guidance from the supreme court, this Court (at least in recent years) has consistently rejected requests that we recognize "waivers by conduct" under a variety of factual scenarios.

City of New Braunfels v. Carowest Land, Ltd., 432 S.W.3d 501, 521

(Tex.App.–Austin 2014, no pet.).

Hughes cites Texas Southern University v. State Street Bank & Trust

Co., 212 S.W.3d 893 (Tex.App.-Hou. [1st Dist.] 2007, pet. denied).

However, this Court has expressly rejected application of State Street. See

Labrado, 2012 WL 43385, at *3 (court does not have discretion to recognize

State Street’s waiver by conduct exception to sovereign immunity in the

absence of Supreme Court authority).

Other courts have likewise criticized State Street. See e.g. City of

McKinney v. Hank's Rest. Group, L.P., 412 S.W.3d 102, 114

63 (Tex.App.–Dallas 2013, no pet.) (the amorphous nature of State Street’s

waiver-by-conduct doctrine weighs against its adoption); Leach v. Texas

Tech Univ., 335 S.W.3d 386, 401 (Tex.App.–Amarillo 2011, pet. denied)

(State Street contradicts the Supreme Court's statements about the only

avenue for redress being through the Texas Legislature).

Some courts have distinguished State Street on the ground that the

State Street case involved an egregious set of facts. It appears that no court

has applied State Street to find a waiver of immunity.

Before this Court expressly rejected any application of State Street, this

Court distinguished State Street in Smith v. City of Blanco, 2009 WL

3230836 (Tex.App.–Austin 2009, no pet.). The Court observed that in State

Street TSU’s attorney had given false assurances of the validity and

enforceability of the contract to lure CMS into the contract, then TSU

reneged on its agreement, and tried to hide behind the cloak of immunity.

2009 WL 3230836, at *4. In Blanco, this Court failed to find such egregious

conduct - stressing that the city had made no representations to plaintiff

concerning immunity. Id. The court held that the plaintiff’s potential

misunderstanding of the law was not enough to justify an equitable waiver of

64 immunity against the City. Id.

As in Blanco, the County is not alleged to have made any

representations to Hughes concerning immunity. Even if Hughes presumed

that the County was obligated to name the library in honor of his family, a

misunderstanding of the law does not justify an equitable waiver of

In Jonah Water Special Util. Dist. v. White, 2009 WL 2837649

(Tex.App.–Austin 2009, pet. struck), this Court failed to find the

“extraordinary factual circumstances” presented in State Street where the

record did not indicate that the defendant had procured a contract with

promises it intended to break and the lawsuit appeared to have grown out of

what was initially a good-faith disagreement over performance under the

contract. 2009 WL 2837649, at *3.

Here, the County asserts immunity in an effort to avoid the expense of

trial. The pleaded facts do not demonstrate that the County made promises

Here, there is a good-faith dispute over performance of the library

naming provision: whether the 1994 commissioners court found that the

65 SMU litigation recovery was substantial enough to name the library in honor

of Hughes’ family (disputed); and, even if it had, whether in the course of

naming the new library the 2011 commissioners court is somehow precluded

from making its own determination (a contrary determination). This issue

was previously discussed.

Finally Hughes, having waived his statutory remedy, has shown no

right to equitable relief. Hughes could have sought legislative consent to sue.

See IT-Davy, 74 S.W.3d at 854 (if a party who contracts with the State feels

aggrieved, it can seek redress by asking the Legislature to waive immunity

from suit). Hughes does not plead that he even sought, much less obtained,

legislative consent. Hughes has not pleaded a basis for waiver of immunity

by conduct.

66 PRAYER

Appellee Tom Green County prays:

1. That the judgment be in all matters affirmed.

2. That Appellee have such other relief as to which it has shown itself

entitled.

Respectfully submitted,

JAMES DAVID WALKER P. O. Box 41 Milano, Texas 76556 SBOT 20706000 Phone: (512) 636-9520 Email: walker@2appeal.com COUNSEL FOR TOM GREEN COUNTY

67 CERTIFICATE OF WORD COUNT

I certify that this document contains 12,672 words.

CERTIFICATE OF SERVICE

On June 17, 2016, this document was electronically served on Counsel for Appellant: David H. Smith (dhsmith@dgclaw.com).

James David Walker

68 NO. 03-16-00132-CV HUGHES V. TOM GREEN COUNTY

APPENDIX TO APPELLEE’S BRIEF

Appendix1. Order Granting Tom Green County’s Plea to the Jurisdiction (CR:833)

Appendix2. Mutual Partial Assignments (CR:692-700)

Appendix3. Plaintiff’s Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action (exhibits omitted) (CR:805-815)

Appendix4. Settlement Agreement (CR:751)

Appendix5. Compromise and Settlement and Release of All Claims (RR3:241-247)

Appendix6. Final Judgment (SMU Litigation) (RR3:159-163) Appendix1

Order Granting Tom Green County's Plea to the Jurisdiction

(CR:833) CAUSE NO. Al30194C

CHARLES J. HUGHES, § IN THE DISTRICT COURT OF Plaintiff, § § V. § TOM GREEN COUNTY, TEXAS § TOM GREEN COUNTY, § Defendant. § 51st JUDICIAL DISTRICT

ORDER GRANTING TOM GREEN COUNTY'S PLEA TO THE JURISDICTION

On February 16, 2016, the Court heard and considered Tom Green County's Plea to the

Jurisdiction. After hearing evidence and argument of counsel, the Court finds that Tom Green

County's Plea to the Jurisdiction should be granted.

It is, therefore, ORDERED that Charles Hughes' claims and causes of action arising out

of or pertaining to the Mutual Partial Assignments are dismissed for lack of subject matter

·11-..~ (~--"---!- hLA-c:l ~ '\l{..._.z fYI.~fl,vl PC<-<-~~ f /ts ~)o-r-~ jurisdiction. ; Y'-. tl ,~ ~Y:le-r J-r; h~ ,'1-._ ~"" ·tVvvt. -h---1 ~w{_~~ b."""'.':r"~'-A-<.....t-; Signed this 1b_ day of February 2016. · ·- ~ "'""'"' q f A ~

JAY GIBSON SENIOR DISTRICT JUDGE SITIING BY ASSIGNMENT

833 Appendix2

Mutual Partial Assignments

(CR:692-700) Filed for Record 2/9/2016 3:42:51 PM Sheri Woodfin, District Clerk Tom Green County, Texas

Wli!IQAS, Clui.rles Hughes, CUcl crew Ca:a:tu, uci Joan Crews Hoyt, (herein~ft:er referred to as the "hei2:s-•t:-law•) ·have filed an intervention in Cause No, CV91•0426-A, styled •rn Be: !!'.he will at Puwa.in ~. Hughes, Jr., /Jec:eased, n against Southern Methodist Univer~itr (hereinafter referred to as "SMU"), believing and clatmi~g that, ~ng other things, the Last Will and mestament of D~Jlmin J!l, Jluqhes, Jr. cioes not specify how hia estate will l:le haZidl.etl or to whom it will pass aftu all bequests have been satisfied clue to en~nt fulfillments anci lapsec1 bequests, such ~ that the heirs-at-law, as defined by Texas legal statutes, should i.nheri t from Duwain 2. Hughefl, Jr. ; anci wal!lRBAS, Tom Green County (hereiuefter referreci to as "the County") haa filed an intervention in Cause No. CV91-0426•A, styled "In Re: !l'he w.ill o£ Duva.:tn B, Hughes 1 Jr, , Depe~tsecl, " against SMU,

))elievinq and. clailllinq that, among other things, the :trast Will ud Test.eu111mt of Duwain 1!1. Bughell, Jr. specifie11 that the ·estat:e use'l:s in eXt::ess of the l;leq11est to SMU sb~ld pass to t.he County 1 pUrsuant to the residuary a~a~se contained in the willJ apd WJ:Ul:IU!lAS 1 the heirs-at-law and the Co\Ulty would inevitably suffer s~ve~e costs and legal ~~see by i.ncie~endently pu~eqing

the!r causes of aotiop regarding the construction of the will of Duwa~n E. H11qhea, Jr. (hereinafter referred to as "the Will") due to the unl~ted funds available to SMD, even thoqgh it is clear ' EXHIBIT ~' 51 I

692 that either the beirs-at-~aw or the County or bath are clearly entitled, l:»y both tbe terms of the Will as well ae the applicable Wexaa st:atl!l.1:t!JJ 1 rules aud laws, to receipt af all U101U.ea, ~tropert.if!s, anci mineral int~s'ts uncia:~: the Duwain B. Bughes, Jr. Will ~ ~eas of the gift to SMU (the DUW'\iU B. Bugbes, :Sr. Chair fo~ l~g11sh Qt Soutbe~ Methodist univerqity) upon aaid Chair's endow.ment havinq been fulfille4J an4 WIBQAS, the Chair was establ.iabed wi~ an endgwment in exaees of $5DOtODO, sueh ~h4t the testamentary iDtent of the gift to SMU in the Will has beeQ tully aA4 completely fulfilled ana satisfiedf and ~, there is no dispute among the signataries to this c:loamue111: that SJm is ce~ainly not entitled to anything above $500,000 for the Chair eJldowment, puz:osa.ant. to the WUl; and WIQilQAS, the e1gnatories hereto a.~ee th~t this cloaument is in no way iptended to eliminate or reduce in any fashion tbe causes of action, claims, ar rigbt:s held by the be!rs•at•law OJ: the County; and WBBRaAS, SMD has filed sUit iA Cause wo. CV9l-04260A, styled "In Re: !l'he will tJf Dawa.in B. Hughes, Jr., Deaeaseq," simply fo~

the p~ase of o~tainiug all the assets and ~o4uqtian from tho~e

asae~s to qse for pu:poaes other than endow.m&Pt of a·Chair in the SMD Bnglisb Pepartment, all of whiah is wholly inapp~opr~ate and cantraey ta the testqeni:aey intent of D~in I· Buglles, Jr • ; and WBBRBAS, Sm:J sltauld not and is not entitled to talce more than was bequeathed to it by the Will, i.e., $500,000 ·for a Chair in

-2-

HUGHES_RRFP000002

693 Bnql:Lall, un4e:r any legal theoey, pr~c:tple of equity, o: claim of jusUQe; and wa.KBas, ~he heirs-at-law and the CQunty De1ieve, an4 fe~l that tbe Will is cleaJ:, that Duwai.u I· Bugbes, J7:. IJBVe;r: intended. h1a eDt~$ mineral e•tate to pass to SMD far wba~eve~ unlimited pu:p~aes it desired. HOW, TJmlWI'DRB, know all men by these presents: Wba't: tlle 'Q.ndersigned parties ta -this agreement 4o hereby agree as fallqws: l. P;p;j;ies • '!be pzu:ties to thip a~~ement are Chulep Bugbes, Carol Crews· C~e~, and Joan C:ewa Hoyt (bere1naft~ aol1e~tively :refe~ed to as tttbe ~ei~s-a.t-1"-wn) and wam G:t:een county (he:.:eiDafter referz:oecl ~ to as a~~e CountyP). 2. Aqreement to Qonttnne L~tigation and to As1iqn Prcaeeds of. Causes of Ag'b.iPD• Upan the exeaut1an of ~his agra~t py all p.rties, and iD aonside~ation of tbe county's actions mentianed herein, Charles Bugbee, Ca.rpJ. c~ews carter, and Joan crews Boyt agree to aoDtinue the litigatioa against SMD, to amend the pleacUugs as all pa,rtie~

hereto ~ointly cleean appropriate in JJue:h au:Lt, and. to seelc collectio~ of tbe sums awed by SMD to Ube heirs-at-law and the Coun~J'• mbe hei~a .. at•:t.aw, as herein def~ed., f~rther agree, and by affixiug tbeu sigllatures to th:Ls document, do herelly assign to aJUi for the b~nefit of ~am Gree~ Coun~y 50% of the net·prooeeds they actual~¥ +~aeive f~om Cause mo. CV9l-0426-A1 sty~ed nzn Re: ~he

HUGHES_RRFP000003

694 w.i.ll of Duwa.tn B. Bughes, .:rr. , Deoeased, " aft~r satisfaction of all expenses, co~t~, an4 leg•l fees, and SOt of all mineral inte~ests

they aot~~tl~ reeaive tram said lawsuitJ however, ~ designated hei~s~qt-la~ shatl exclusively ~etatn all executive ~igbta reg~ding qll s~ab miDe~al inte~ata. ~his partial assignment to WOJP G~ee11 Co1mty .is without ~estriation or limitatian rega.r:dinq the use to which tbeae funds or mineral interests may be applied. CJille Couty fw:tber ag:-ees, ill oonsicieratiofl of the aatianfl of the 4ea.ignatec.t heirs-at-law mentianecl here~, that the CoWl'l::y, by affix,i.ng the signature of the duly authorized :representative of the County to this dcoqment does hereby assign to and for the benefit of Chutes Bugbes, Carol Crews Carter, and Joan Crews Boyt, jointlf, SO% of tbe net proceeds it eotually ~eceives from C-use ~ mo. ·cv94--0426-A, styled "In .Re: · !'he w.tll of .Duwa.tn :s~ Hughes, Jr., Deceaseq, rr af-ter satisfaat=.ian of all e~penses, casts, and leg-.1 fees cm4 sO% of All mineral inte:r:ests it ac1:ui:J.ll' receives from p v·4 aaic! 1•wt:suit; howeve~, the Coqt~t.y a~ees that the desi~at.ed bei:a:oa--#,At at-law stJ.all exclusively ret,..in an4/or be aa~igned herein all ~~J, exeautive righte regarding- a.ll such mine:r:a.l inte;-este. In furth~r /:i /Jsc·/.J,~ aonsider~tion of t~~s ~tter, the County agrees to name the ~n tC Cl~dj~r mnteS'-4 rr:w county libraey, in honer of Dq.wa.in B. Bugbee , ;Jr, , if the co~ssioners aoQsider the County's ulttmate ~ecover,r,in the cause to 13e •IU!stlilltt,i.al enough for s\\Ch ::ec:ognition. fia ~a I: evauL r l!ohe /j lllaiu iJ:I;iz;IUO:t-.nti4I be I'Uilliarl Lhe ~uweeb1 B. Hughs$, at!. U b!I!M!Y ~~ -et>her 1!;44111# l:l:mL :L=cs:puxal:ae ~e'eet:e:e 'e name.- (" .f/('

-4-

HUGHES_RRFP000004

695 ••:axe~tive t;l.gh~a 11 a~a1~ mean the excl.usiva :r:igbt to exeaate oil, qaa and mine.~:al. lease a without jainde: · of the County as to the cambine4 ~erals of the be~s-at-law ana the County and does not inalud.e bonQsea OJ:" other %'eveDtaes fr011 the respective mineral· inte~~at~ of the p~ie"•

mbepe mutual assig,qments are irrevocable and are intended to be Ito mutual exahange of so• of the .respective :Lnterests of tbe parties hereto in any recovery uncler sa.icl cause against SMtJ and any othe+ adve~se pe:t~es who may be joined in the a~use ~y mutual a~eament of the parties'be~to. 3. Prgaegution o£ L!tiqaticp agd §ettlement• ~~am the date of tbesa mutual assignments, the undersigned partiea, in aonjuctiou with their at.to:clley,;s, 'l'bompaan, Coe, cousins I Iz-ans 1 :t.·.:r..t. and Ball & :tcane, r...L.f. shall be jaintly :esponaible fo:r: the contLnuation and praseaution of t;.he litigation involving SMD and any other culpable parties wbo ~y be added as parliee .tn sucA actio~&. Any clQ..ims originally awned, prior to this assi~en~, b.Y ~~ Gree~ County ~y be brought i~ its name or in the uam~ of the heirs·~t-1aw1 and any alatms ·originally owned by the hei:rs-at.•law, pz:iar to this ass.i.gnment, ataY be brought in their names o~ in the name af m~ G~een County. !be f&~ies and their atta~~eyp shall joiatly make the determination regarding in whose name(s) t~e su,i.t aba.ll be cant:Lnued. Jlotbing in tbifJ a~eement is i~te~4e4 ~o preve~t the parties fr~ filing sui~, or con~inuing

litigati.pn,, both in the lla.ti\S of 1:be assig~ao~ an4 iP the name cf the assignee. :tt iP flu:tber uncie~stood and ag+eed that all signatories

-s-

HUGHES_RRFPOOOOOS

696 hereto will fully and faithfully coo~ate in tbe deve~apment and pros~u'tign of the litiga.tion, wlliah will include, but noi: lle lild.teQ. t.o, appea.J:a.nae by deposition or a.t tx-i!Ell o:f. any neaessary witnesaes, est:~lishtng the alaims that are the subject of these m\lt\1"1 pu:t.lal assignments, and further, avai~ility for t:ial if .i.t ia deemed neceJ:~sax;y by counsel iD :eurtherance of tbe proseaution au4 to collect ~he partially-ass1gne4 p~oceeds gf the litigat~on;

bowevca:r:, all litig•tion &¥-peuaes shall be bame by the heirs-at-law and the County, as eetablisbed by their ~espective attorneys' fee ag:eemants. . It i&~ fUX'ther expres,.ly unclea:stood and a~ed that all control over prosecution aa4/or settl~~t of ~he litigation between tbe hei~s-~t-law a~ the County on the one hand ~~ against SMD or ~ other C\llfable· parties O!l the other han4 s)lall be jointly aont~o~lea cy t~e signatories· hereto. 4. Re~reaentatipna GQd Indeqro!tv: '»be un4e;'s!gDed. beirs-at-l·aw .J:epresent ·to the county tbat they join1=-ly :epz:esant q4 wo~ld. own a two..tbi%'ds intet"est in the estate of all o~ the in~estate heirs-at-law of Duwain B· B~qhes, Jr., if he had ~d without a will at any t~e durtnq 1985 throuqh tbe present time, tqtd t!hat they jointly :-epresent a,nd. woul.cl own a.· two- thit'~ inte.ttest. in the estate of all the intesta.te hei:r:a-at-law of nuwain I. :auqhes, Jr. I if he bad died without a will. ail his actual date of death, excluding in the l-tter c~~e oniy the one-eighth intet:e~at helci in tnst for the life of Carlotta Hartlnan, remainder to the u~4ersiqned he~rs-at•law.

-6-

HUGHES _RRFP000006

697 l~b of th~ undersigned heirs-at-law ~ep~esents·to t~e county tba;t. t.be intestate 1nte3:'8sts desc:z:ibed above and. t~eir claims ~ato ~amain intact as to the assets ana minerals in issue in · said aa1.Jee ~d that tbez:e have been na p:iar assigmnentt:~,

eonvey~ncee, or transfe:• of any kind that would affect •ny a£ t:heir 1ntereste the:eein, there have been no liens, deed$ of trp.st, sec~ity ~nt~rests, o~ otbe~ encumbr~aes granted or imposed upon any of th~ir interests tbe:ein, there have baen no bankruptcy a~

otber d~btor p~Qceedings that wo~ld adversely affect their interest$ therein, IUlQ the~e ue no other defeats, adverse cla.iws, or other •~tters that would aaversel7 af~ect their interests, as iutesta~~ be~s, iu the aesets end minerala in issue in sai4 cause ·other t~n the la.w regarding the disposition of an.y excess of tlle gift to S)1.U. '!be aounty repx-esents to the unde:r:signed beizs-at..-law that the c:~ou~t,-'s inteJ:est .i.n and alainls to the assets ud mtneral~ in issue in said cause, as ~eneficiar,r of tbe ~estdue, remain intaat and that tbe:e have been no pria~ assig~nts, conveyances, or t.-ansfe:rts of any kind. that would. affect the county's interest therein, there bave been no liens, deed.s of t%Ust, security inte~esta, o3:' other enP'UlftPrances qJ:"anted or imposec:l upon its inte~est the+ein, tne~e have been ~o han~ptcy or other debtor proaeeQ!Qes that wo~ld a4ve~aely affect it~ inte%'eet tbe:ein, aRd the~e ~e no other defects, adverse claim~, or otber ~tters that would aqver$ely ~ffect its interest, as beneficiary of the resi4ue, in the assets and ~nerals in issue in said cause, other

HUGHES_RRFP000007

698 tb~u the effect ai the county's sale of th~ house desc:ibed in tbe residllaiy clause ant! tbe 1-.w regazc;U.ng tl)e dtsposition of uy excesa of the gift to SMD. In the event a party ha.s assigned let:ls than that party rep:eseQts herein that that party hap to a.s:rrign, the assignee party or parties shall be antitle4 to recover the def1cienay f~am the asaignj.Dg party and. shall have any ather z:emedies p~c:avicleci by law. S• Miscel1apeous. Whe signatories hereto apecifiaally waive any conflicts of inte:r:est, whet.he~ actqal az: potential, wbich exi11t, or may exist, by the Ratuat ~ap~pentation of all partie~ he:eto, following the execution of tbia dccmnent and the effeatuatian of the lqU.tual partial. assignments reflecbecl herein, py the law fixm of Thompson, ~ Coe, Coua~ne & I~ans, ~.~.p. and Pall & Lane, ~.~.P.

'!he aignata~tes !u:rther waive any conf1ictca of interest in the rep~esent-~ion by ~aappou, Coe, Cousins & Iron$, ~.L.P. of the heirs-at~ law agai2u1t 'the County, arlcl the repJ:esentation by Ball & Lane, :t..;..P. of 1:.he Coun"t:y against tlle heirs-at-law as to any clisputes, llreacbes, O:t' lld.srepresentations that Wll' arise under this a.qreeme~t,.

'»billS agreement is entere4 into in the St.ate of Wexas and shall be const~~e4 ~4 !~terpreted in aeaardanae wtt~ the laws of the Sta1:e of !t'exas. tt i• un~erstood that the conei4eration stated herein is of a oant+actual nature and not a mere recital.

-a-

699 All partiera to this agreement agree to and w.il·l execute any document~! ~eaesr:s4:cy to comply wi.th iiPY requir~ts iaposed by ~exas 'r~perty Code 1 12.014(b)• Al:S. parties agree that this clocument may Ae exeautecl in muli:.iple originals, with suah doc:\ll'nents being constned as a single doaumant.

Duly ~ tho~imed aep~asentative of ~d fxom mom G~eeA oaaa~y

HUGHES_RRFP000009

700 Appendix3

Plaintiff’s Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action (exhibits omitted)

(CR:805-815) Filed for Record 2/9/2016 3:50:04 PM Sheri Woodfin, District Clerk Tom Green County, Texas

CAUSE NO. A130194C

CHARLES J. HUGHES, § IN THE DISTRICT COURT OF § Plaintiff, § § v. § TOM GREEN COUNTY, TEXAS § TOM GREEN COUNTY, § § Defendant. § 51st JUDICIAL DISTRICT

Plaintiff’s Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action

To the Honorable Judge of the Court:

Plaintiff Charles J. Hughes files this Third Amended Petition to Enforce a Settlement

Agreement he entered with Tom Green County to resolve claims the underlying lawsuit.

I. Related Case

1. This action is being filed to enforce a settlement agreement entered in Cause No.

CV91-0426-A; In re the Will of Duwain E. Hughes, Jr., in the 51st Judicial District Court of Tom

Green County.

II. Discovery

2. Discovery in this action should be governed by the Level III scheduling order entered

in this matter.

III. Parties

3. Plaintiff Charles J. Hughes is a resident of Tom Green County.

4. Defendant Tom Green County is a county located in Texas. Tom Green County has

answered and appeared in this suit.

Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 1

805 IV. Venue and Jurisdiction

5. Venue is mandatory in Tom Green County. Tex. Civ. Prac. & Rem. Code § 15.015.

6. This Court has subject matter jurisdiction over Tom Green County because this action

arises from a settlement agreement entered between parties to an action initiated, in part, by Tom

Green County, and Tom Green County thereby waived sovereign immunity. Kinnear v. Tex.

Comm’n on Human Rights ex rel. Hale, 14 S.W. 299, 300 (Tex. 2000)(holding the state waives

immunity from suit when it files suit); Tex. A&M Univ.–Kingsville v. Lawson, 87 S.W.3d 518, 521

(Tex. 2002)(holding where the state has waived sovereign immunity, and then enters an agreement

settling the claims subject to that waiver, the state cannot assert sovereign immunity as a basis to

avoid enforcement of the settlement). Further, Tom Green County has waived sovereign immunity

from suit as a result of its conduct in entering into and then breaching the Mutual Partial

Assignments between Hughes and the County.

7. In addition, Hughes files a declaratory judgement action seeks to invalidate and set

aside a March 1, 2011 motion and resolution of the Tom Green County Commissioners' Court made

in violation of the Texas Open Meeting Act. Texas courts have repeatedly held that the State has

waived sovereign immunity for alleged violations of the Texas Open Meetings Act. See, e.g., Riley

v. Comm'rs Ct., 413 S.W.3d 774, 776 - 77 (Tex. App. - Austin 2013, no pet.). Moreover, this action

seeks recovery of amounts in excess of the minimum jurisdictional limits of this Court.

7. In addition to declaratory relief, Hughes seeks monetary relief of over $1,000,000.00.

V. Facts

8. Duwain E. Hughes, Jr. was the uncle of Charles J. Hughes. Duwain Hughes lived

in San Angelo and taught English for many years. Following Duwain Hughes’s death, The Will

Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 2

806 of Duwain E. Hughes, Jr. (the “Will”) was probated in the County Court of Tom Green County,

Texas, on April 6, 1965.

9. Under the terms of the Will, Duwain E. Hughes, Jr. left his then new home, collection

of rare books, and his music collection to the Tom Green County Library board, to establish an

adjunct library in his name. Duwain E. Hughes, Jr. also left the residue of his estate to the Tom

Green County Library Board to pay down the mortgage on the home and for the upkeep and

maintenance of his home. At that time, this residual gift included a significant mineral estate that

was worth several million dollars.

10. Inexplicably, instead of honoring Duwain E. Hughes, Jr.’s wishes and maintaining

his home as a library, the County chose to sell the home at a steep discount. This allowed the

residuary gift of Duwain E. Hughes, Jr.’s estate to arguably lapse to Southern Methodist University

(“SMU”), which also received gift of specific mineral interests under the Will.

11. On April 9, 1991, Southern Methodist University filed a lawsuit styled In re: The Will

of Duwain E. Hughes, Jr. in the 51st Judicial District Court of Tom Green County under Cause No.

CV91-0426-A (the “Underlying Suit”). In the Underlying Suit, SMU requested that the court

release a restriction on the use of a gift made to it under the Will for the endowment of a Chair of

English for SMU, so that the excess value of that gift could otherwise be used to support and

maintain the English Department for SMU. At that time, the value of the mineral estate that SMU

had received exceeded the maximum amount necessary to endow a Chair for the Department of

English by approximately $4,000,000.

12. On May 3, 1991, Tom Green County intervened in the Underlying Suit on behalf of

the Tom Green County Library, and sought a declaration that the residue of the gift to SMU

belonged to the County Library.

807 Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 3 13. On March 30, 1993, Charles J. Hughes intervened and sought a declaration that

because of the lapse in the gift of the residue to Tom Green County, the residue of the gift to SMU

belonged to Duwain E. Hughes, Jr.’s heirs-at-law – Charles J. Hughes, Carol Crews Carter, and Joan

Crews Hoyt (the “Heirs-at-Law”).

14. The Court ordered the parties to mediation of the SMU Lawsuit on May 26, 1994.

Prior to mediation, Tom Green County and the Heirs-at-Law entered an agreement titled Mutual

Partial Assignments (hereafter the “Agreement”), attached hereto as Exhibit A, by which the parties

irrevocably assigned and divided the proceeds of any recovery in the lawsuit 50% to the Heirs-at-

Law, and 50% to Tom Green County. The signatories to the Agreement were authorized to sign

by all required authorities.

15. Specifically, under the terms of the Agreement Tom Green County promised to name

its Central Tom Green County Library in honor of Duwain E. Hughes, Jr. or Frances Hughes Crews,

“if the commissioners consider the County’s ultimate recovery to be substantial enough for such

recognition.” Exhibit A, p. 4.

16. The Tom Green County Commissioner’s Court authorized Timothy Weatherby, one

of the Commissioners at the time, to serve as the County’s representative for the mediation. Exhibit

B, Affidavit of Timothy Weatherby. Mr. Weatherby was fully aware that a settlement and

substantial recovery from SMU would trigger the naming obligation under the Assignment

Agreement. Id. Counsel for the County, Phil Lane, and the County Attorney, Tom Goff, also

participated in the mediation. Pursuant to the Agreement, Hughes and the Heirs at Law aligned with

the County at mediation and joined forces against SMU. After the initial separate offers to the

County and to the Heirs at Law, the County representatives and the Heirs at Law moved into the

same room and began negotiating for joint offers from SMU.

808 Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 4 17. SMU offered to pay the Heirs-at-Law and Tom Green County $1,000,000 in

settlement for their claims. Id.

18. At the time that the $1,000,000 settlement offer was made, and although he was

already delegated authority, Timothy Weatherby contacted the other County Commissioners, and

they all agreed that the County’s $500,000 share was “significant” (as it constituted the largest single

cash donation the County had ever received), should be accepted, and warranted naming the Central

Tom Green County Library in honor of Duwain E. Hughes, Jr. or Frances Hughes Crews, as set forth

in the Agreement. Id.

19. Because the Tom Green County representatives at the mediation stated that the

County’s portion of SMU’s offer would be substantial enough to warrant naming the Central Library

as contemplated in the Assignment Agreement, the Heirs-at-Law agreed to go along with Tom

Green County and accepted SMU’s offer. Id. Under the terms of the Assignment Agreement, the

Heirs-at-Law and Tom Green County split those proceeds 50/50. Id.

20. On July 6, 1994, Tom Green County Commissioner’s Court met in open session.

During this session, the Commissioners considered the ultimate recovery in the lawsuit to be

substantial enough and ratified the Agreement with Hughes and the Heirs at Law.

21. After ratifying the Agreement and the separate agreement settling claims against

SMU and dismissing the lawsuit, Tom Green County deposited the settlement proceeds it received

into a segregated bank account called the Hughes Library Fund. Exhibit B.

22. Tom Green County used a part of the Hughes Library Fund to hire an architect to

evaluate potential new locations for the central library, and also utilized a portion of the funds to hire

a grant consulting firm to assist the Library Board with grant applications. Id.

23. The planning and preparation for the new library location was interrupted, however,

when financial difficulties caused by bad investments and criminal cover ups by a previous County

809 Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 5 Treasurer made it necessary to utilize a portion of the Hughes Library Fund to assist Tom Green

County in meeting its financial shortfalls. Id.

24. The Tom Green County Commissioners discussed the use of the Hughes Library

Fund to assist with the County’s financial burdens with Charles Hughes, who agreed to allow the

fund to be used in such a manner, so long as the County fulfilled its obligation to name the new

Central Library in honor of Duwain E. Hughes, Jr. or Frances Hughes Crews, whenever it was built.

Id. The County agreed to this stipulation. Id.

25. Charles Hughes met and spoke with County Judge Mike Brown and Timothy

Weatherby on a number of occasions to discuss the County’s plans regarding the naming of the

Central Library, and was repeatedly informed that the issue would be addressed when the location

for the new central library was chosen, and it was an appropriate occasion for giving it a name.

26. The Tom Green County Central Library remained unnamed until March 1, 2011,

when the Tom Green County Commissioners met to vote on naming portions of the new Tom Green

County Central Library, which had just been constructed by remodeling the former Hemphill-Wells

Building. Exhibit C, Excerpt of Minutes of County Commissioners Meeting. Notwithstanding the

County’s agreement with Mr. Charles Hughes, and the donations made by his uncle Duwain E.

Hughes, Jr. —which had the County retained would have had a value of more than $12,000,000—

the County Commissioners read a pre-written "motion" and “voted” unanimously to name the library

the “Stephens Central Library,” in recognition of a recent $3,000,000 donation from Pollyanna and

Steve Stephens. Id.

27. In addition to a blank for the Commissioners to fill in with “Stephens Central Library,”

the pre-written motion provided that "Tom Green County's ultimate recovery in [the Underlying

Lawsuit] is not substantial enough to name Tom Green County's main library in honor of Duwain

E. Hughes Jr. [or] in honor of Frances Hughes Crews . . . ." See Exhibit C (emphasis added).

810 Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 6 28. On information and belief, the County Commissioners came to a final decision on this

matter and pre-drafted the accompanying motion in a private meeting prior to the public hearing - a

meeting at which neither Plaintiff nor any other members of the public were present. The pointed

reference to the language of the Assignment Agreement clearly indicates the County Commissioners

were aware of the County’s prior obligation to the Hughes family, and entered the March 1, 2011

hearing with a settled intent to disregard that obligation, regardless of the Commissioners Court’s

decision on July 6, 1994. Thus, the naming decision was a foregone conclusion, and the County's

purported deliberations and "vote" at the hearing were simply a sham. The pre-written motion only

announced the County’s pre-determined decision, and was orchestrated to present an appearance of

due process and facial compliance with the Open Meetings Act.

VI. Causes of Action

29. The foregoing facts are fully incorporated herein by reference for all purposes.

A. Declaratory Judgment

30. Section 551.102 of the Texas Open Meetings Act (the "Act") provides that "[a] final

action, decision, or vote on a matter deliberated in a closed meeting under this chapter may only be

made in an open meeting that is held in compliance with the notice provisions of this chapter."

31. The March 1, 2011 motion was pre-determined and pre-written by the Commissioners

prior to the public hearing. Upon information and belief, the official "vote" taken in open session was

merely an announcement of the actual decision, which was made by the Commissioners in private,

outside of the open meeting. Neither Plaintiff nor any other member of the public received any notice

of, or were given any opportunity to participate in, these private deliberations.

32. Such actions constitute a direct violation of the Texas Open Meetings Act and the

March 1, 2011 resolution should therefore be declared invalid and set aside. See TEX. GOV'T CODE

ANN. § 551.141 ("An action taken by a governmental body in violation of this chapter is voidable");

811 Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 7 See Lower Colorado River Auth. v. City of San Marcos, 523 S.W.2d 641, 646 (Tex. 1975)

(recognizing the courts' inherent authority to invalidate and set aside government decisions made in

violation of the Act).

33. Violations of the Texas Open Meetings Act may be addressed through a number of

remedies available under the Act and separate statutory authorities. One such remedy is found in

Section 551.142 of the Act, which allows any "interested person" to "bring an action by mandamus

or injunction to stop, prevent, or reverse a violation or threatened violation of this chapter by

members of a governmental body." In lieu of a writ of mandamus or injunction, an "interested

person" authorized under Section 551.142 may also seek a declaratory judgment to invalidate the

unlawful act under Chapter 37 of the Texas Civil Practice and Remedies Code. See Bd. of Trs. v. Cox

Enters., Inc., 679 S.W.2d 86, 88 (Tex. App. - Texarkana 1984) (recognizing declaratory judgment

action as an additional option to challenge violations of the Act); see also TEX. CIV. PRAC. & REM.

CODE ANN. § 37.003 (authorizing a court to declare the "rights, duties, and other legal relations" of

citizens and public officials).

B. Breach of Settlement Agreement

34. The Agreement constituted a valid and enforceable settlement agreement between

Tom Green County and the Heirs-at-Law, including Charles Hughes.

35. Tom Green County waived sovereign immunity with respect to those claims by

intervening in the Underlying Lawsuit filed by SMU.

36. Tom Green County accepted the proceeds from the settlement reached with SMU and

the Heirs-at-Law, including Charles Hughes, thus Charles Hughes and the other Heirs-at-Law fully

performed their obligations under the settlement agreement. Further, on July 6, 1994, Tom Green

County ratified the Agreements.

812 Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 8 37. Tom Green County, however, has materially breached the Agreement by failing and

refusing to name the Tom Green County Central Library in honor of Duwain E. Hughes, Jr. or

Frances Hughes Crews. At the time of the County’s breach on March 1, 2011, the value of the

naming obligation was $3,000,000.00. As a result of the County’s breach, Hughes suffered damages

in the amount of the lost value of the naming obligation – $3,000,000.00.

38. Further, and in the alternative, because Tom Green County has materially breached

the agreement, it is liable for the $500,000 in settlement proceeds it received, plus pre-judgment and

post judgment interest.

C. Action for Money Had and Received

39. Tom Green County accepted the benefits of the Assignment Agreement, and the

subsequent settlement reached with SMU and the Heirs-at-Law. By accepting those benefits, Tom

Green County enjoyed the savings of significantly limiting the scope and risk associated with the

Underlying Lawsuit as it approached mediation, and then benefitted from its use of the $500,000 in

settlement proceeds for many years.

40. Tom Green County received this benefit on the basis of false promises that it would

name the Tom Green County Central Library in honor of Duwain E. Hughes, Jr. or Frances Hughes

Crews.

41. Tom Green County has failed and refused to do equity, by returning the $500,000 it

has unjustly received, in exchange for its promise to name the Central Library.

42. Tom Green County has instead named the Central Library the “Stephens Central

Library,” and continues to retain, or has otherwise appropriated the $500,000 it received and that in

equity, justice, or in law belongs to Hughes.

43. Therefore, Tom Green County is obligated to return the $500,000 to the Charles

Hughes as is equitable and just.

813 Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 9 VII. Conditions Precedent

44. All conditions precedent to the relief sought by Charles Hughes have been fulfilled

or have occurred.

VIII. Attorney’s Fees

45. Charles Hughes seeks reasonable and necessary attorneys' fees for Tom Green

County’s breach of contract pursuant to Texas Civil Practice & Remedies Code Section 38.001(8)

and seeks such attorneys’ fees as are equitable and just pursuant to Texas Civil Practice and

Remedies Code Section 37.009.

IX. Damages

46. As a result of Tom Green County’s breach of the Agreement, Hughes suffered the loss

of the value of the naming obligation, which at the time of the County’s breach was valued at

$3,000,000.00.

47. Alternatively, as a result of Tom Green County’s breach of the Agreement, Hughes

suffered the loss of his share of $500,000 by his reliance on the County’s Agreement.

48. Further, and in the alternative, Tom Green County was unjustly enriched in the amount

of $500,000.00 in funds that it received and that amount should be returned to Hughes.

IX. Prayer

Wherefore, Plaintiff Charles J. Hughes respectfully requests that upon trial of this matter the

Court enter judgment for Hughes against Tom Green County, invalidate and set aside the March 1,

2011 Resolution made in violation of the Texas Opening Meetings Act, order the County to pay

Charles J. Hughes the amount of damages sought herein, plus pre-judgment interest, costs, attorney

fees, post judgment interest, and grant Charles J. Hughes such other and further relief, at law or in

equity, to which he is justly entitled.

814 Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 10 Respectfully submitted,

DAVIS, GERALD & CREMER A Professional Corporation 400 W. Illinois, Ste. 1400 Midland, Texas 79701 432-687-0011 Fax: 432-687-1735

By: /s/ Daniel J. Harper David H. Smith Texas Bar No. 00794652 dhsmith@dgclaw.com

Daniel J. Harper Texas Bar No. 24074363 djharper@dgclaw.com

ATTORNEYS FOR PLAINTIFF

I certify that on this 9th day of February, 2016, a true and correct copy of the foregoing was delivered as follows:

VIA E-SERVICE Wm. Keith Davis Hay, Wittenburg, Davis, Caldwell & Bale, L.L.P. P.O. Box 271 San Angelo, Texas 76902

/s/ Daniel J. Harper Daniel J. Harper

815 Plaintiff's Third Amended Petition to Enforce Settlement Agreement and Declaratory Judgment Action Page 11 Appendix4

Settlement Agreement

(CR:751) (·--. ,--... t ·SE'ITLEMENT AGREEMENT

. This is a memorandum of understanding between the undersigned parties in settlement of a pending dispu'te, which has been voluntarily resolved through a mediation process conducted at Judiciai Arbitration & Mediation Services, Inc. (J • A· M • S) on the date hereinbelow indicated. In accordance with their understanding, the parties agree: . Jvv $~ M

It is al_so agreed: (1) that the attorneys for said parties have prepared and approved this agreement, and that the parties have relied entirely on the legal advice of their respective counsel in effecting this settlement; (2) that the parties enter into this agreement of their own voluntary will and accord; and (3) that this agreement will be considered to have·been made pursuant to Rule 11, Texas Rules of Civil Procedure. The parties further agree to execute and deliver such additional agreements and documents as shall be nec:essary to carry out the purposes of this agreement, and that this agreement may be enforced as any other contrac~

Signed this L6 74 day of /ttatJ J191{at 6~~-~~ ./.4 I -

'&-t r~4n rbCtbt~ 4£4tL~< Parties and/ or Representa~ . Counsel v

' DEPOSmON ! ,.3rr It-t z..-1 ~c._) 751 Appendix5

Compromise and Settlement and Release of All Claims

(RR3:241-247) ;- . .· -: DEFENDANT'S i EXHIBIT s !

l ,I Too-·

NO. CV91-0426-A m ~ 1ll !i DEPOSITION EXHIB~ ;s I ~ '2-1 i-1 Lt (.yvi

IN RE: THE WILL OF § IN THE DISTRICT COURT OF § DUWAJN E. HUGHES, JR., § DECEASED § TOM GREEN COUNTY, TEXAS § SOUTHERN METHODIST UNIVERSITY, § BENEFICIARY § 51ST JUDICIAL DISTRICT

WHEREAS, SOUTHERN METHODIST UNIVERSITY, acting through its Board

of Trustees, herein referred to as SMU, filed an Application to Release Restriction with

reference to the will of Duwain E. Hughes, Jr., in the above entitled and numbered cause,

and has supplemented such application with its Supplemental Petition for Declaratory

Judgment, which pleadings and all amendments and supplements and the will of Duwain E.

Hughes, Jr. are here referred to for all purposes;

WHEREAS, TOM GREEN COUNTY, on behalf of TOM GREEN COUNTY

LIBRARY, filed a Plea In Intervention in said cause, which plea in intervention was

amended by TOM GREEN COUNTY with its First Amended Plea in Intervention and

Original Counterclaim for Declaratory Judgment, and a Supplemental Plea in Intervention

and Counterclaim for Declaratory Judgment, which pleadings asserted rights in the Estate

ofDuwain E. Hughes, Jr., and such pleadings and all amendments and supplements are here

referred to for all purposes;

WHEREAS, CHARLES J. HUGHES filed his Plea In Intervention and Petition for

Declaratory Judgment in said cause, which asserted rights in the Estate of Duwa41 E.

Hughes, Jr., and made KATHARINE HUGHES TRIGG, CAROL CREWS CARTER,

COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS P<>n<> 1 AND JOAN CREWS HOYT, additional interested parties in the suit, such pleadings and

all amendments and supplements are here referred to for all purposes;

WHEREAS, pursuant to order of the Court SMU filed a Petition to Join Party which

made FIRST NATIONAL BANK OF WEST TEXAS, TRUSTEE OF THE CARLOTTA

HUGHES TRUST as an additional party to the suit;

WHEREAS, all parties who have or might have an interest in the Estate of Duwain

E. Hughes, Jr. to the extent of the oil, gas and minerals and disputes descnbed herein, are

parties to the suit and have filed pleadings, which pleadings are here referred to for all

purposes;

WHEREAS, there are various disputes concerning the will of Duwain E. Hughes, Jr.,

and the Estate of Duwain E. Hughes, Jr., which disputes are reflected in the various

pleadings which have been filed herein, and which disputes include, without limitation,

interpretation of the will of Duwain E. Hughes, Jr., denomination and classification of the

nature of the gift made to SMU in paragraph No. III. of such will, whether or not such will

created a fee simple title to the properties descnbed in SMU without limitation or

restriction, whether or not the will created a charitable trust to SMU for the purpose of

funding one chair in the English department at SMU, whether or not the purpose of such

a trust, if any, has been fulfilled and whether the funds in excess of such fulfillment should

belong to Torn Green County under paragraph No. V. of the will or to the intestate heirs

of Duwain E. Hughes, Jr., whether or not there are restrictions in the will on the use of the

funds by Tom Green County, whether or not the doctrine of cy pres is applicable, and if so,

how it should be applied, whether or not restrictions, if any, on the use of the funds, by

SMU or Tom Green County should be relieved pursuant to the Texas Uniform Management -

COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS Page 2 Funds Act, Tex. Prop. Code § 163.001 et seq., or under the doctrine of cy pres, all of which

disputes are further detailed in the pleadings filed herein;

WHEREAS, it is agreed that resolution of the said disputes is problematical and

difficult to predict with any degree of certitude, that said suit, unless compromised and

settled by the parties, will require extensive time and expense in the courts, and the parties

therefore have agreed to a complete and final compromise and settlement of such suit and

all of such disputes in accordance with the agreement made at the mediation hearing

conducted on May 26, 1994, which compromise and settlement is further reduce(\ to writing

in this agreement which is as follows:

Green County, Charles J. Hughes, Carol Crews Oirter, and Joan Crews Hoyt, which

payment will be made on execution of the settlement documents by all parties and on entry

of a final judgment in this suit by the presiding judge.

2. Judgment will be entered in the suit which will declare and confirm:

a. that SOUTHERN METHODIST UNIVERSITY has a vested fee title in

the oil, gas and other mineraJs owned by Duwain E. Hughes, Jr., at his death,

situated in Reagan and Irion Counties, Texas, save and except any interest

therein which had been inherited by Duwain E. Hughes, Jr., from his brother

Jackson Hughes, and all claims made by the parties to this proceeding other

than SOUTHERN METHODIST UNIVERSITY to said oil, gas and other

minerals are held for naught and denied;

b. that SOUTHERN METHODIST UNIVERSITY is entitled to all funds

and income which it has received from the Estate of Duwain E. Hughes, Jr.,

COMPROMISE AND SE'ITLEMENT AND RELEASE OF ALL CLAIMS Page 3 (---

and all claims made to such funds and income by the parties to this

proceeding other than SOUTHERN METHODIST UNIVERSITY are held

for naught and denied;

c. that the restriction, if any, contained in the will of Duwain E. Hughes, Jr.,

concerning the use of the estate devised to SOUTHERN :M ETHODIST

UNIVERSITY under such will is obsolete, inappropriate or impracticable, and

is released to the extent that SOUTHERN METHODIST UNIVERSITY

shall be entitled to use the property and income therefrom derived from the

estate of Duwain E. Hughes, Jr., for the purpose of establishing, supporting

and maintaining a chair in its English Department, called the "Duwain E.

Hughes, Jr. Distinguished Chair in English", and for any other purpose

connected with supporting and maintaining the· English Department at

SOUTHERN METHODIST UNIVERSITY;

d. that the restriction, if any, contained in the will of Duwain E. Hughes, Jr.,

concerning the use of the estate devised to TOM GREEN. COUNTY

LIBRARY under such will is obsolete, inappropriate or impracticable and is

is released to the extent that TOM GREEN COUNTY, ON BEHALF OF

TOM GREEN COUNTY LIBRARY, shall use any funds derived from the

settlement of the claims made by TOM GREEN COUNTY in this suit for any

purpose connected with operating, supporting, maintaining and housing the

Tom Green County Library;

e. that all claims made by the parties to this proceeding against SOUTHERN

METHODIST UNIVERSITY have been fully and finally settled and released,

COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS Page 4 ,' and all relief prayed for by any party not specifically granted is specifically

denied;

f that all court costs and attorney's fees shall be borne by and paid by the party incurring the same; and

g. that the judgment entered is restricted solely to the declaration of rights

to the oil, gas and minerals which were part of the e~tate of Duwain E.

Hughes, Jr. and that other oil, gas and mineral interests of any kind owned by

the parties hereto or their predecessors in title are not in any manner

determined or affected by the judgment.

3. In consideration of the agreements made herein and the money to be paid as set

forth herein, TOM GREEN COUNTY, on behalf of TOM GREEN COUNTY LIBRARY,

CHARLES J. HUGHES, CAROL CREWS CARTER, JOAN CREWS HOYT, FIRST

NATIONAL BANK OF WEST TEXAS, TRUSTEE OF THE CARLOTTA HUGHES

HARTMAN TRUST (which has made no claim against SMU), and KATHARINE

HUGHES TRIGG (who has made no claim against SMU), DO HEREBY FOREVER

RELEASE, REMISE AND DISCHARGE SOUTHERN METHODIST UNIVERSITY

from all claims of any kind or nature pertaining to or arising from the will and Estate of

Duwain E. Hughes, Jr., and from all causes of action which have been asserted in this suit,

or which might have been asserted in this suit.

4. All parties agree to pay the attorney's fees and court costs incurred by such party,

which agreement shall be reflected in the judgment of the Court to be entered herein.

5. It is further understood and agreed that this agreement is a compromise and

settlement of a disputed matter, it is not an admission of liability or facts by any party

COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS Page 5 ·' hereto, and neither this compromise and settlement agreement nor any part thereof shall

ever be construed or used as an admission on the part of any party hereto.

6. This compromise and settlement agreement and release contains the entire

agreement between the parties, and the terms hereof are contractual and not a mere recital.

EXECUTED in multiple counter parts on this the ___ day of _ _ _ _ _ __

~RSITY SMITH,

rn

CARLOTTA HUGHES HARTMAN

FIRST NATIONAL BANK OF WEST SIMS, KIDD, HUBBERT & WILSON TEXASONBEHALFOFTHE CARLOTTA HUGHES HARTMAN TRUST

By: _;;- 4;/ &u:__.----- . L/ First

HALLdZ,~ By: fi~ dcz_J-Jf Phil Lane, Attorney for Tom Green County

COMPROMISE AND SETTLEMENT AND RELEASE OF ALL CLAIMS Pal!e ti ( (

/ I HUGHES & LUCE, L.L.P.

By:~v{;5terii{~ -eS}uml1ey for Kath,€rine Hugnes Trigg 0-'

~Rfw~c'AA~·L~~ 1HOMPSON, COE, COUSINS, & IRONS, L.L.P.

COMPROMISE AND SE'ITLEMENT AND RELEASE OF ALL CJ.ATMS »---"' Appendix6

Final Judgment (SMU Litigation)

(RR3:159-163) ,. t •• Ill

·NO. CV91-0426-A

IN RE: THE WILL OF

DUWAIN E. HUGHES, JR., DECEASED

SOUTHERN METHODIST UNIVERSITY, BENEFICIARY 51ST JUDICIAL DISTRICT· ..

On this ~ 7 day of __S_tii-"-·p_ti.-'-e_~-t_;;G:...:..:::...:..fl..::__ _, 1994, carne on to be heard the abo':e

entitled and numbered cause, and it was announced to the Court that all matters in...

controversy between the parties which is the subject matter of this suit have been fully and

finally agreed to and settled as is further evidenced by the signatures of all parties and their

attorneys agreeing to this judgment, and the Court, having considered the pleadings, the

agreement of the parties and the evidence offered, finds and concludes as follows:

that the Court has jurisdiction over all the parties hereto and that all

necessary parties for entry of this judgment are properly before the Court;

that the Attorney General of the State of Texas has filed a proper Waiver of

the right of the Sta!e of Texas to intervene and be a party to this proceeding;

that the Court has jurisdiction over the subject matter of this suit, and the

jurisdiction and authority to enter this judgment, pursuant to its general

jurisdictional authority, <:md punmant to the Uniform Management of

Instiiutional Funds Act, Texas Property Code § 163.001 et seq., and the

Uniform Declaratory Judgments Act, Texas Civil Practice & Remedies Code,

~· J7 .001 cl_sc~; and the Court finds and is of the opinion that this judgment

should he entered.

- Pngcl IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED a... ·-·-·A·····: A SOUTHERN METHODIST UNIVERSITY has a vested fee title in the

oil, gas and other minerals owned by Duwain E. Hughes, Jr., at. his death~ '•''

situated in Reagan and Irion Counties, Texas, save and except any interest

therein which had been inherited by Duwain E. Hughes, Jr. from his brother

Jackson Hughes, and all claims made by the partie$ to this proceeding other

than SOUTHERN METHODIST UNIVERSITY to said oil, gas and other

B. SOUTHERN METHODIST UNIVERSITY is entitled to all funds and

income \-Vhich it has received from the Estate of Duwain E. Hughes, Jr., and

all claims made to such funds and income by the parties to this proceeding

other than SOUTHERN METHODIST UNIVERSITY are held for naught

and denied;

C. the restriction, if any, contained in the will of Duwain E. Hughes, Jr.,

concerning the use of the estate devised to SOUTHERN METHODIST

UNIVERSITY under such will is obsolete, inappropriate or impracticable, and

it is hereby decreed that such restriction is released to the extent that

SOUTHERN METHODIST UNIVERSITY shall be entitled to use the

property and income therefrom dc::ivcd from the estate of Duwain E. Hughe~,

Jr., for the purpose of establishing, supporting and maintaining a chair in its

Engli~;ll Department, called the "Duwain E. Hughes, Jr. Distinguished Chair

in Engiish'', and for any other purpose connected with supporting and

maintaining the English Department at SOUTHERN METHODIST

UNIVERSITY;

• Pagel D.

concerning the use of the estate devised to TOM GREEN

LIBRARY under such will is obsolete, inappropriate or impracticable ·,•,',··' '

is hereby decreed that such restriction is released to the extent'

GREEN COUNTY, ON BEHALF OF TOM GREEN COUNTYLIBRARY,,,,

shall use any funds derived from the settlement of the claims made by TOM GREEN COUNTY in this suit for any purpose connected with operating,

supporting, maintaining and housing the Tom Green County Library;

E. all claims made by the parties to this proceeding against SOUTHERN

METHODIST UNIVERSITY have been fully and finally settled and released,

and all relief prayed for by any party not specifically granted herein is

spccificaliy denied; and

F. all court costs and attorney's fees shall be borne by and paid by the party

incurring the same, and it appearing to the Court that all costs of tt"lis suit

have been paid, no further order is entered with respect thereto.

IT IS SPECIFICALLY ORDERED AI~D DECREED that the judgment entered in

this case is restricted solely to the declaration of rights to the oil, gas and minerals which

were part of the estate of Duwain E. Hughes, Jr. Other oil, gas and mineral interests of any

kind owned by the parties hereto or their predecessors in title are not in anv manner

determined or affected by this judgment.

'1994.

CURT STEIB, JUDGE PRESIDING

• Page3 ~ ., ....

APPROVED AND AGREED TO:

FIRST NATIONAL BANK OF WEST SIMS, KIDD, HUBBERT & WILSON TEXAS ON BEHALF OF THE CARLO'n'A HUGHES HARTMAN TRUST

~~=~~~~~~~-=~~- ]ohn C. (Sims, Attorney for First / /National Bank of West Texas . / i/ \../

HALL~ ~E~LP. By: ;/1/:zd ,-~. . Phil Lane, Attorney for Tom Green County

HUGHES & LUCE, L.L.P.

• Page4 • PageS