Joshua Development GP, LLC, as the General Partner of Joshua Development Company, Ltd. v. Johnson County Special Utility District

Court of Appeals of Texas·Decided November 9, 2022·No. 10-20-00183-CV·Published

Opinion

IN THE

TENTH COURT OF APPEALS

No. 10-20-00183-CV

JOSHUA DEVELOPMENT GP, LLC, AS THE GENERAL PARTNER OF JOSHUA DEVELOPMENT COMPANY, LTD., Appellants

v.

JOHNSON COUNTY SPECIAL UTILITY DISTRICT, Appellee

From the 413th District Court Johnson County, Texas

Trial Court No. DC-C201900699

MEMORANDUM OPINION

In four issues, appellant, Joshua Development GP, LLC, as the general partner of Joshua Development Company, Ltd. (collectively “Joshua”), appeals the trial court’s granting of a plea to the jurisdiction in favor of appellee, Johnson County Special Utility District (“JCSUD”). We reverse and remand.

Background

The focus of this dispute is the Joshua Meadows Subdivision “Community Facilities Contract” (the “Contract”) entered into in July 1999, by each party’s predecessor-in-interest. The Contract included provisions where Joshua’s predecessor- in-interest, Heritage Properties of Texas, LLC, agreed to construct a ground water storage facility and pump station, sewer lift stations, force mains, water main, and all water and sewer lines within the Subdivision, and pay $142,760 as full satisfaction of all impact fees for the Subdivision. In return, JCSUD’s predecessor-in-interest, Johnson County Freshwater Supply District No. 1 (“JSFWSD”), which later formally merged with JCSUD, agreed to extend and connect an existing water main to a groundwater storage facility and provide water and sewer service to the homes pursuant to its rates and policies. The Contract also stated that title to this infrastructure would convey to JSFWSD upon issuance of a Letter of Acceptance following final completion.

In November 1999, Heritage paid the $142,760 as prepayment for 332 water/sewer taps and impact fees. The parties do not dispute whether the predecessors-in-interest fulfilled the initial terms of the agreement.

In September 2004, Heritage sold its interests and assigned its rights and obligations in the Joshua Meadows Subdivision to Joshua. In 2007, the JCSUD formally merged with JCFWSD. From 1999 to 2007, no water or sewer impact fees were charged

Joshua Dev. GP, LLC, as the Gen. Partner of Joshua Dev. Co., Ltd. v. Johnson County Special Util. Dist.

by JCSUD or its predecessor-in-interest or paid by Joshua or its predecessor-in-interest for approximately sixty-one homes constructed in Joshua Meadows.

Joshua alleges that JCSUD breached the Contract on June 20, 2019, when it sent a letter to Joshua stating that it would no longer “provid[e] a ‘free ride’” to Joshua and that the current utility fees would apply. JCSUD reasoned that the 1999 Heritage contract had no language binding JCSUD.

At the time of JCSUD’s June 20, 2019 letter, approximately 150 of the original 332 lots remained undeveloped. Furthermore, from 1999 to 2019, the cost of water and sewer connection fees increased from $430 per lot, as provided in the Contract and pre-paid by Joshua, to $5,580 per lot. Joshua alleges that JCSUD’s actions will add approximately $837,000 to Joshua’s remaining costs of development.

In September 2019, Joshua filed its original petition asserting, among other things, that JCSUD breached the Contract by “wrongfully charging Plaintiff $5,580.00 per lot in what should be pre-paid impact fees for each new home constructed.” JCSUD filed a general denial, as well as a plea to the jurisdiction, arguing that it is entitled to governmental immunity and that Joshua’s contract-based claims did not fall under any provision that waives JCSUD’s governmental immunity. Joshua filed amended petitions and multiple responses to JCSUD’s plea to the jurisdiction, asserting that JCUSD waived governmental immunity under Chapter 271 of the Texas Local Government Code and that JCSUD’s failure to accept Joshua’s pre-paid impact fees as full satisfaction of the Joshua Dev. GP, LLC, as the Gen. Partner of Joshua Dev. Co., Ltd. v. Johnson County Special Util. Dist.

impact fees for new development in the subdivision constituted an inverse condemnation and unconstitutional taking of Joshua’s property for which there is no governmental immunity.

Both Joshua and JCSUD sought written discovery. Joshua responded, JCSUD did not. Rather, JCSUD requested discovery extensions and filed a motion for protective order and stay of discovery. The trial court did not set for a hearing or rule on JCSUD’s motion for protective order or its stay of discovery. With the hearing on JCSUD’s plea to the jurisdiction quickly approaching, Joshua filed a motion for continuance of the hearing on the plea to the jurisdiction and a motion to compel JCSUD to respond to discovery requests. Joshua’s motions for continuance and to compel were set for a hearing on the same day as the plea to the jurisdiction.

On June 17, 2020, the trial court heard argument on all three pending matters—

JCSUD’s plea to the jurisdiction and Joshua’s motions for continuance and to compel. At the conclusion of the hearing, the trial court took the case under advisement. Later, the trial court signed an order granting JCSUD’s plea to the jurisdiction and dismissing Joshua’s claims for want of jurisdiction.

Following the dismissal of its claims, Joshua requested that the trial court enter findings of fact and conclusions of law. In a letter sent to the parties, the trial court declined to enter findings of fact and conclusions of law because “the case was disposed of pretrial and [on] jurisdictional grounds.” This accelerated appeal followed. Joshua Dev. GP, LLC, as the Gen. Partner of Joshua Dev. Co., Ltd. v. Johnson County Special Util. Dist.

Plea to the Jurisdiction

In its first issue, Joshua contends that trial court erred by granting the JCSUD’s plea to the jurisdiction because the JCSUD’s immunity is waived under section 271.152 of the Texas Local Government Code given that the Contract complies with section 271.151 of the Texas Local Government Code. See TEX. LOC. GOV’T CODE ANN. §§ 271.151- .152. STANDARD OF REVIEW Governmental immunity has two components: immunity from liability and immunity from suit. Tooke v. Mexia, 197 S.W.3d 325, 332 (Tex. 2006). A governmental entity that enters into a contract waives its immunity from liability but retains its immunity from suit unless its immunity from suit is specifically waived by the Legislature. Id. Governmental immunity from suit implicates a trial court's subject matter jurisdiction and is properly asserted in a plea to the jurisdiction. See Engelman Irrigation Dist. v. Shields Brothers, Inc., 514 S.W.3d 746, 751 (Tex. 2017). We review the trial court's ruling on a plea to the jurisdiction de novo. Houston Belt & Terminal Ry. Co. v. City of Houston, 487 S.W.3d 154, 160 (Tex. 2016). Our ultimate inquiry is whether the particular facts presented affirmatively demonstrate a claim within the trial court's subject-matter jurisdiction. City of El Paso v. Heinrich, 284 S.W.3d 366, 378 (Tex. 2009).

Our analysis must begin with an evaluation of the plaintiff's pleadings. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). When examining the Joshua Dev. GP, LLC, as the Gen. Partner of Joshua Dev. Co., Ltd. v. Johnson County Special Util. Dist.

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