City of San Antonio v. Alamo Aircraft Supply, Inc., Alamo Aircraft, Ltd., Wulfe Rentals, Ltd., and Lobo GC, Ltd.

448 S.W.3d 507, 2014 WL 3927722, 2014 Tex. App. LEXIS 8830

• Court: Court of Appeals of Texas
• Decided: August 13, 2014
• Docket: 04-14-00057-CV
• Status: Published

Opinion

OPINION

Opinion by:

PATRICIA O. ALVAREZ, Justice.

In its efforts to widen Southwest 36th Street, appellant City of San Antonio filed a condemnation suit in probate court against owners of certain adjoining properties (Appellees). Thereafter, the parties executed a possession and use agreement (PUA) for the properties at issue. Later, with the condemnation suit still pending, Appellees sued the City in district court for breach of the PUA. They argued their breach of contract claim inherits the waiver of immunity from the City’s condemnation suit. The City contended its immunity was not waived, but the trial court denied the City’s plea to the jurisdiction, and the City appeals. We reverse the trial court’s order and render judgment dismissing Appellees’ suit.

Background

A. Genesis of PUA

In its street-widening project, the City negotiated with Appellees to purchase portions of their properties which adjoin Southwest 36th Street. After negotiations failed, the City began condemnation proceedings in probate court. To secure certain project funding, the City sought and obtained the PUA. The parties do not contest the validity or content of the PUA, but they dispute its nature. They disagree whether it is a partial settlement of the City’s condemnation suit which extends the City’s waiver of immunity to Appellees’ breach of contract cause of action.

B. PUA Overview

Under the PUA, the City deposited certain funds into the court’s registry. In return, it received immediate possession of portions of the properties subject to specified conditions. In other terms, the parties agreed the only remaining issues to be litigated were (1) the amount of money each landowner and tenant was due as compensation for the property taken (and associated damages) and (2) the City’s right to take portions of their properties.

C. Suit for Breach of PUA

After the PUA was executed, the City entered into a separate contract with the street-widening project’s prime contractor. According to Appellees, the prime contract did not contain provisions protecting Ap-pellees as required by the PUA. When the prime contractor allegedly obstructed access to their properties, required Appel-lees to relocate personal property and fences without sufficient notice, and violated other terms of the PUA, Appellees sued the City for breach of the PUA and attorney’s fees.

Citing Lawson, Appellees contended their breach of contract claim was not barred because the City waived its governmental immunity when it brought its condemnation suit 1 against them in probate court, and their breach of contract claims inherit that waiver. See Tex. A & M Univ.-Kingsville v. Lawson, 87 S.W.3d 518, 521 (Tex.2002) (plurality opinion).

D. City’s Plea to the Jurisdiction

In its plea to the jurisdiction, the City asserted immunity from suit. It insisted the PUA’s plain language conclusively demonstrates it does not settle the condemnation claims, Lawson does not apply, and the City retained its immunity from Appellees’ breach of contract suit. See id. The trial court denied the plea, and the City appeals.

Standard of Review

“Sovereign immunity from suit defeats a trial court’s subject matter jurisdiction and thus is properly asserted in a plea to the jurisdiction.” Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex.2004).

A. Mirrors Summary Judgment Standard

The standard of review for a plea to the jurisdiction “generally mirrors that of a [traditional] summary judgment.” Id. at 228 (referencing Tex.R. Civ. P. 166a(c)). After the plaintiff “allege[s] facts that affirmatively demonstrate a trial court’s subject matter jurisdiction,” id. at 226, the governmental entity must “assert[] and support[] with evidence [the proposition] that the trial court lacks subject matter jurisdiction,” id. at 228. If the governmental entity meets its burden, the plaintiff must “show that there is a disputed material fact regarding the jurisdictional issue.” Id. The court must “take as true all evidence favorable to the nonmovant [and] indulge every reasonable inference and resolve any doubts in the nonmovant’s favor.” Id.

B. Undisputed Jurisdictional Evidence

If the governmental entity does not challenge the sufficiency of the plaintiffs’ pleadings, but instead challenges the jurisdictional efficacy of undisputed facts, the jurisdictional question is one of law. Id. at 226-28. “[I]f the relevant undisputed evidence negates jurisdiction, then the plea to the jurisdiction must be granted.” State v. Holland, 221 S.W.3d 639, 643 (Tex.2007) (citing Miranda, 133 S.W.3d at 227-28).

We review a trial court’s ruling on a plea to the jurisdiction de novo. Hol land, 221 S.W.3d at 642; Miranda, 133 S.W.3d at 228.

Immunity From Suit

A. Governmental Immunity, Waiver

In a suit against it for money damages, a city may assert governmental immunity “unless it has been waived.” Reata Const Corp. v. City of Dall., 197 S.W.3d 371, 374 (Tex.2006); accord Tex. Natural Res. Conserv. Comm’n v. IT-Davy, 74 S.W.3d 849, 853 (Tex.2002); see City of Carrollton v. Singer, 232 S.W.3d 790, 795 (Tex.App.-Fort Worth 2007, pet. denied) (addressing a city’s governmental immunity).

A city’s governmental immunity is waived if it exercises its right of eminent domain to acquire property, see Tex. Const. art. I, § 17 (takings clause); Holland, 221 S.W.3d at 643; Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591, 598 (Tex.2001), for the purpose of “widening ... any alley, street, or other roadway,” Tex. Loa Gov’t Code Ann. § 251.001(a) (West Supp. 2014). 2

B. Elements of Taking Claim

Generally, the elements of a taking claim are that (1) a governmental entity acted intentionally and thereby took or damaged property (2) for a public use (3) without either adequately compensating the owner or obtaining the owner’s consent. Tex. Const. art. I, § 17; City of Austin v. Whittington, 384 S.W.3d 766, 772 (Tex.2012); Little-Tex Insulation, 39 S.W.3d at 598. A city may exercise its right to take property through a condemnation suit. Tex. Prop.Code Ann. § 21.012 (West Supp. 2014); Whittington, 384 S.W.3d at 772-73.

C.Inheriting Waiver of Immunity under Lawson

The City does not dispute that its immunity from suit and liability is waived in its condemnation suits. See Tex. Const. art. I, § 17 (takings clause); Holland, 221 S.W.3d at 643. However, it vigorously disputes Appellees’ contention that their breach of contract cause of action inherits the condemnation suits’ waiver of immunity under Lawson. See Lawson, 87 S.W.3d at 522-23. We begin by briefly reviewing Lawson.

1. Texas A & M University-Kingsville v. Lawson

Lawson was a University faculty member whose employment was terminated. Id. at 518. Lawson sued the University for various civil claims including an alleged violation of the Whistleblower Act. Id. at 518-19. The University filed a plea to the jurisdiction and raised sovereign immunity. Id. at 519. The trial court sustained the plea against all of Lawson’s claims except his Whistleblower Act 3 and constitutional claims. Id.

Thereafter, the parties executed an agreement to settle all of Lawson’s claims. Id. Lawson received a cash payment and promises from the University regarding how it would respond to inquiries about his employment history. Id. In return, Law son released his claims and his suit was dismissed with prejudice. Id.

Later, after the University allegedly responded to inquiries 'about his employment history differently than agreed, Lawson sued for breach of the settlément agreement. Id. The University asserted its immunity from Lawson’s suit for breach of contract. Id.

The court rejected the University’s argument. Id. at 521. It held the State “may not ... claim immunity from a suit brought to enforce a settlement agreement reached to dispose of a claim” for which the State’s immunity had been waived. Id. at 522-28. In effect, Lawson allows a breach of settlement agreement cause of action to inherit the immunity waiver of the claim the agreement settled. See id.; Singer, 282 S.W.3d at 796.

Having reviewed Lawson, we turn to the PUA. We examine its terms to see if it settled a taking claim—a claim from which a breach of contract cause of action could inherit a waiver of the City’s immunity. See Lawson, 87 S.W.3d at 522-23.

2. Possession and Use Agreement Terms

The PUA includes a number of terms that impose requirements on the City and Appellees, but we focus on terms that might settle a taking claim. The following excerpts describe the PUA’s effects on the condemnation suits.

WHEREAS, Owners and Tenant and the City recognize and acknowledge that Owners’[] and Tenant’s consent to the entry across, over, upon and under the Property and possession of the Property by the City shall not be construed as a waiver of rights of Owners for (i) just compensation for the Property acquired, for compensation for damages, if any, to the remainder of the real property owned by Owners that may result from the City’s use or acquisition of the Property taken and relocation costs or (ii) to challenge the right to take or possess the Property following the Special Commissioners’hearing; and

WHEREAS, Owners and Tenant recognize and acknowledge the City’s right to seek to acquire the Property by negotiation and/or by condemnation for the purposes stated herein, and that the City acknowledges that this Agreement shall not alter or affect any other rights, claims, causes of action or defenses not covered herein that any party may assert; and

WHEREAS, this consent to the entry and possession, being at the request of the City, is being given for the benefit of the City and the general public, with the issues of total compensation due to Owners and Tenant for the taking of the Property, as well as the right to condemn, to be resolved in the future.

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[TJhe grant herein made shall not prejudice, in any way, Oumer’s right to (i) receive full and just compensation for the Property acquired, damages to the remainder of Owners’ property, damages to the Tenant and relocation costs and expenses in accordance with the Uniform Relocation Act of the Owners and Tenant and/or (ii) seek disallowance of the condemnation.

Possession and Use Agreement (emphasis added).

3. Effect of PUA’s Terms

In considering the PUA and its terms, we note the City argues the PUA is unambiguous, and Appellees did not argue otherwise. Having reviewed the PUA, we agree the PUA terms at issue here “can be given a certain or definite legal meaning or interpretation,” and thus they are not ambiguous. See Coker v. Coker, 650 S.W.2d 391, 893 (Tex.1983) (contract construction). Therefore, we construe the PUA as a matter of law. See id. We now address the arguments the parties make about the effect of the agreement.

a.Parties’Arguments

The City argues the PUA does not settle any aspect of their condemnation suits.

Appellees contend “the PUA arose in the context of a condemnation case, and partially settled or resolved issues in that condemnation case by,” inter alia, allowing the City to take possession of the properties before the condemnation proceedings had concluded. They insist Lawson does not require a complete settlement of a parent claim in order for the child breach of contract cause of action to inherit the parent claim’s waiver of immunity. Cf Lawson, 87 S.W.3d at 522-23 (addressing waiver of immunity in “a suit brought to enforce a settlement agreement reached to dispose of a claim” for which the governmental entity’s immunity was waived).

b.Terms Addressing Taking Claim Elements

We consider whether the PUA settled or disposed of a claim for which the City’s immunity was waived—i.e., the City’s taking of portions of their properties.

In this suit’s context, the elements of a taking claim are (1) the City exercised its powers of eminent domain to take Appel-lees’ property (2) for a public use (3) without adequate compensation or Appellees’ consent. See Tex. Const, art. I, § 17; Whittington, 384 S.W.3d at 772. The parties do not dispute that Appellees did not consent to the taking, the City acted intentionally and took portions of their properties, and the taking was for a public use. Thus, we examine the PUA to see if it settled either of the two remaining aspects of a taking claim: the right to take the property, or the amount of adequate compensation.

c.Express Disclaimer of Settlement

The PUA’s plain language is dispositive. It expressly leaves “the issues of total compensation due to Owners and Tenant for the taking of the Property, as well as the right to condemn, to be resolved in the future.” It adds that the agreement “shall not prejudice, in any way, Owner’s right to (i) receive full and just compensation for the Property acquired ... or (ii) seek dis-allowance of the condemnation.”

These provisions, and the other excerpts provided above, are clear and unambiguous. They expressly disavow that the PUA settles either the amount of adequate compensation or the City’s right to take the properties. Considering these express terms, we conclude that, unlike Lawson’s agreement that settled his Whistleblower claim, the PUA does not settle or dispose of any claim for which the City’s immunity was waived. 4 See Lawson, 87 S.W.3d at 522-23. Thus, Appellees’ breach of contract cause of action does not inherit the taking claim’s waiver of immunity. 5 See id.

Because the City’s immunity to Appel-lees’ breach of contract cause of action was not waived under Lawson, the trial court was required to grant the City’s plea absent some other waiver of the City’s immunity. See Holland, 221 S.W.3d at 643 (citing Miranda, 133 S.W.3d at 227-28) (“[I]f the relevant undisputed evidence negates jurisdiction, then the plea to the jurisdiction must be granted.”).

D. Waiver of Immunity by Statute

In its plea to the jurisdiction the City contended its immunity was not waived by statute. See Tex. Loc. Gov’t Code Ann. §§ 271.151-160 (West 2005 & Supp. 2013). It attached a copy of the PUA and cited City of San Antonio v. Reed S. Lehman Gram, Ltd., No. 04-04-00930-CV, 2007 WL 752197 (Tex.App.-San Antonio 2007, pet. denied) (mem. op. on reh’g) for the proposition that any conveyance of an interest in real property was not a contract for goods or services.

In response to the City’s ground and evidence, Appellees did not (1) argue that the City’s immunity to their breach of contract suit was waived by statute or (2) provide summary judgment evidence. See Tex. Loo. Gov’t Code Ann. § 271.152 (waiving a city’s immunity from suit for entering into a contract for goods or services); Holland, 221 S.W.3d at 643.

We conclude Appellees failed to raise a genuine issue of material fact on a waiver of immunity by statute for the City’s alleged breach of the PUA. See Miranda, 133 S.W.3d at 228.

Conclusion

The City of San Antonio’s immunity from suit and liability was waived in its condemnation suits against Appellees’ properties. However, the PUA did not settle the taking claim, and thus Lawson does not convey the taking claim’s waiver of the City’s immunity to Appellees’ breach of contract cause of action. Because Appellees’ did not assert any other basis for waiver of immunity, the trial court erred by denying the City’s plea to the jurisdiction.

Without reaching the merits of Appel-lees’ breach of the PUA claims, we reverse the trial court’s order and render judgment dismissing Appellees’ suit with prejudice to refiling a breach of the PUA suit in district court.

1 . On an agreed motion, the trial court divided the City’s condemnation suit into eight suits, one for each property.

2 . A city may also waive its immunity from suit and liability by entering into certain contracts. Tex. Loc. Gov't Code Ann. § 271.152 (West 2005); City of Hous. v. Williams, 353 S.W.3d 128, 134 (Tex.2011). However, Ap-pellees do not contend the City waived its immunity from suit merely by executing the PUA.

3 . The Whistleblower Act waives a governmental entity's immunity "for suits alleging violations of its provisions." Lawson, 87 S.W.3d at 521; see Tex. Gov’t Code Ann. § 554.0035 (West 2012) (waiver of immunity).

4 . Appellees invite us to extend Lawson to a partial settlement agreement, but we do not reach that question. Here, the PUA does not conclusively dispose of any essential element of a taking claim.

5 . Appellees also rely on City of Carrollton v. Singer, 232 S.W.3d 790 (Tex.App.-Fort Worth 2007, pet. denied). For purposes of this appeal, it is no different than Lawson. Like Lawson, the Singer agreement fully settled a claim which the Singers could have made, and for which the City's immunity would have been waived. Id. at 799. Singer held the Singers’ suit to enforce the agreement inherited the waiver. Id. at 799-800. Here, the PUA does not settle a claim for which immu nity was waived, and neither Lawson nor Singer applies.