City of Corinth v. NUROCK DEVELOPMENT, INC.

293 S.W.3d 360, 2009 Tex. App. LEXIS 5939, 2009 WL 2356931
CourtCourt of Appeals of Texas
DecidedJuly 30, 2009
Docket2-07-422-CV
StatusPublished
Cited by24 cases

This text of 293 S.W.3d 360 (City of Corinth v. NUROCK DEVELOPMENT, INC.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Corinth v. NUROCK DEVELOPMENT, INC., 293 S.W.3d 360, 2009 Tex. App. LEXIS 5939, 2009 WL 2356931 (Tex. Ct. App. 2009).

Opinions

OPINION

JOHN CAYCE, Chief Justice.

In this interlocutory appeal, appellant, the City of Corinth (the City), challenges the trial court’s denial of its plea to the jurisdiction on sovereign immunity grounds against claims asserted by appel-lees NuRock Development, Inc., NuRock Corporation, NDG-Tower Ridge 1, LLC, and Tower Ridge Corinth 1, Ltd. (collectively, NuRock). We affirm in part and reverse and dismiss in part.

I. Background

This appeal arises from the City’s alleged breach of a settlement agreement between the City and NuRock by which the parties settled NuRock’s claims in an earlier federal lawsuit, NuRock Development, Inc. v. City of Corinth (the Federal Action).1 In the Federal Action, NuRock sought damages and injunctive relief from disputes stemming from NuRock’s efforts to develop and construct an affordable housing project called Tower Ridge in Co[364]*364rinth (the Apartments). NuRock claimed that the City violated both the Federal Fair Housing Act2 and the Texas Fair Housing Act3 because the City’s actions regarding the Apartments were intended to exclude families with children and minorities. NuRock also asserted a takings claim under the Texas constitution,4 as well as a section 1983 claim.5

The April 2005 settlement agreement, as amended in July 2005 (the Settlement Agreement), provided that NuRock would construct the Apartments to certain specifications, that the City would acquire certain right-of-ways along Tower Ridge Road, that NuRock would make specified improvements to Tower Ridge Road, that NuRock would place $120,000.00 in escrow as collateral for the improvements, and that the City would pay NuRock $120,000.00. The parties agreed to dismiss the Federal Action and NuRock began construction of the Apartments.

The City sued NuRock in state court in April 2006, alleging that NuRock breached the Settlement Agreement by failing to place the funds in escrow. NuRock filed counterclaims based on the City’s alleged breaches of the Settlement Agreement, seeking damages, injunctive relief, and a declaratory judgment. NuRock asserted that, despite the Settlement Agreement, the City was interfering with and delaying construction of the Apartments, particularly by refusing to perform inspections or issue building permits or certificates of occupancy for the apartment buildings. At the City’s request, the trial court realigned the parties so that NuRock was the plaintiff and the City was the defendant.

In July 2006, the trial court entered a temporary injunction for NuRock, which the City did not appeal. The injunction required the City to stop refusing to issue temporary certificates of occupancy on the grounds that the Tower Ridge Road improvements had not been completed.

In June 2007, the City filed a plea to the jurisdiction alleging sovereign immunity. The trial court denied the plea and this appeal followed.

II. Standard of Review

We review the trial court’s ruling on a plea to the jurisdiction based on immunity from suit under a de novo standard of review.6 In reviewing the denial of a plea to the jurisdiction, we do not review the merits of the case.7

When a plea to the jurisdiction challenges the pleadings, we determine if the pleader has alleged facts that affirmatively demonstrate the court’s jurisdiction to hear the cause.8 We construe the pleadings liberally in favor of the plaintiffs and look to the pleader’s intent.9 If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial court’s jurisdiction, but do not affirmatively dem[365]*365onstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiffs should be afforded the opportunity to amend.10 If the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend.11 However, if a plea to the jurisdiction challenges the existence of jurisdictional facts, we consider relevant evidence submitted by the parties when necessary to resolve the jurisdictional issues raised, as the trial court is required to do.12

III. Governmental Immunity

A. Settlement Agreement

In its first and second issues, the City asserts that it had immunity from NuRock’s claims for breach of the Settlement Agreement, which settled the Federal Fair Housing Act claim among others.13 Governmental immunity protects governmental entities from lawsuits for damages absent legislative consent.14 The doctrine of governmental immunity encompasses two distinct concepts: (1) immunity from suit (barring a lawsuit unless the legislature expressly gives its consent to suit) and (2) immunity from liability (even if the legislature has expressly given its consent to the suit).15 “Immunity from liability is an affirmative defense, while immunity from suit deprives a court of subject matter jurisdiction.”16

The City possesses immunity from suit and from liability.17 Although a governmental entity like the City waives its immunity from liability when it contracts with private citizens, it does not waive its immunity from suit solely by entering into such a contract.18 Rather, express legislative consent in clear and unambiguous language is required to show that immunity from a breach of contract suit has been waived.19

In Texas A & M University-Kingsville v. Lawson,20 a plurality of the Supreme Court of Texas concluded that when a governmental entity settles a claim for which immunity from suit has been waived, immunity from suit is also waived for a breach of the settlement agreement.21 The plurality reasoned that “when 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.”22

[366]*366The City asserts that Lawson does not apply here because NuRock has not pleaded in this action any state law claim in the underlying Federal Action for which immunity was waived.23 The City reasons that the holding in Lawson is limited to waivers of immunity by the Texas Legislature under state law, and that because NuRock did not assert a claim in the Federal Action for which the immunity is waived under state law, there is no basis for finding a waiver of immunity from the settlement of the Federal Action.24

The City’s argument is based on the concepts of federalism that are embodied in the Eleventh Amendment to the United States Constitution.25

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Cite This Page — Counsel Stack

Bluebook (online)
293 S.W.3d 360, 2009 Tex. App. LEXIS 5939, 2009 WL 2356931, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-corinth-v-nurock-development-inc-texapp-2009.