Sidney B. Hale, Jr. v. City of Bonham

Opinion

A1. Order of January 6, 2015 Granting Plaintiff’s Motion for PartialFILED Summary IN Judgment (CR 1:119). 6th COURT OF APPEALS TEXARKANA, TEXAS 7/7/2015 9:23:00 AM A2. Order of February 12, 2015 Granting Plaintiff’s Motion for Summary DEBBIE AUTREY Judgment (CR 1:192). Clerk

A3. Order of Dismissal dated February 27, 2015 (CR 1:197).

A4. Texas Tort Claims Act, applicable provisions.

A5. Subchapter I, Chapter 271, Texas Local Government Code, applicable provisions.

A6. City of Georgetown v. Lower Colorado River Authority, 413 S.W.3d 803 (Tex.App.—Austin 2013, pet. dism’d).

A7. Plaintiff’s First Amended Petition for Declaratory Judgment (CR 1:24).

A8. Defendant’s Verified Original Answer (CR 1:51).

A9. Defendant’s Original Counterclaim (CR 1:57).

A10. Plaintiff’s Motion for Partial Summary Judgment (CR 1:68).

A11. Defendant’s Response to Plaintiff’s Motion for Partial Summary Judgment (CR 1:107).

A12. Plaintiff’s Motion for Summary Judgment (CR 1:120).

A13. Defendant’s Response to Plaintiff’s Motion for Summary Judgment (CR 1:172).

A14. Plaintiff’s Reply to Defendant’s Response to Plaintiff’s Motion for Summary Judgment (CR 1:182).

A15. Defendant’s Surreply to Plaintiff’s Reply to Defendant’s Response to Plaintiff’s Motion for Summary Judgment (CR 1:189). 39 A1 A2 A3 A4 Page 1

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CIVIL PRACTICE AND REMEDIES CODE TITLE 5. GOVERNMENTAL LIABILITY CHAPTER 101. TORT CLAIMS SUBCHAPTER B. TORT LIABILITY OF GOVERNMENTAL UNITS

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Tex. Civ. Prac. & Rem. Code § 101.021 (2014)

§ 101.021. Governmental Liability

A governmental unit in the state is liable for: (1) property damage, personal injury, and death proximately caused by the wrongful act or omission or the negligence of an employee acting within his scope of employment if: (A) the property damage, personal injury, or death arises from the operation or use of a motor-driven vehicle or motor-driven equipment; and (B) the employee would be personally liable to the claimant according to Texas law; and (2) personal injury and death so caused by a condition or use of tangible personal or real property if the governmental unit would, were it a private person, be liable to the claimant according to Texas law.

HISTORY: Enacted by Acts 1985, 69th Leg., ch. 959 (S.B. 797), § 1, effective September 1, 1985.

NOTES:

Legislative Note. -- * See Texas Litigation Guide, Ch. 290, Negligence; Ch. 293, Claims Against Governmental Entities; Ch. 310, Premises Liability.

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Tex. Civ. Prac. & Rem. Code § 101.0215 (2014)

§ 101.0215. Liability of a Municipality

(a) A municipality is liable under this chapter for damages arising from its governmental functions, which are those functions that are enjoined on a municipality by law and are given it by the state as part of the state's sovereignty, to be exercised by the municipality in the interest of the general public, including but not limited to: (1) police and fire protection and control; (2) health and sanitation services; (3) street construction and design; (4) bridge construction and maintenance and street maintenance; (5) cemeteries and cemetery care; (6) garbage and solid waste removal, collection, and disposal; (7) establishment and maintenance of jails; (8) hospitals; (9) sanitary and storm sewers; (10) airports, including when used for space flight activities as defined by Section 100A.001; (11)waterworks; Page 2 Tex. Civ. Prac. & Rem. Code § 101.0215

(12) repair garages;

(13) parks and zoos;

(14) museums;

(15) libraries and library maintenance;

(16) civic, convention centers, or coliseums; (17) community, neighborhood, or senior citizen centers;

(18) operation of emergency ambulance service;

(19) dams and reservoirs;

(20) warning signals;

(21) regulation of traffic;

(22) transportation systems;

(23) recreational facilities, including but not limited to swimming pools, beaches, and marinas;

(24) vehicle and motor driven equipment maintenance;

(25) parking facilities;

(26) tax collection;

(27) firework displays;

(28) building codes and inspection;

(29) zoning, planning, and plat approval;

(30) engineering functions;

(31) maintenance of traffic signals, signs, and hazards;

(32) water and sewer service;

(33) animal control;

(34) community development or urban renewal activities undertaken by municipalities and authorized under Chapters 373 and 374, Local Government Code;

(35) latchkey programs conducted exclusively on a school campus under an interlocal agreement with the school district in which the school campus is located; and

(36) enforcement of land use restrictions under Subchapter E, Chapter 212, Local Government Code.

(b) This chapter does not apply to the liability of a municipality for damages arising from its proprietary functions, which are those functions that a municipality may, in its discretion, perform in the interest of the inhabitants of the municipality, including but not limited to: Page 3 Tex. Civ. Prac. & Rem. Code § 101.0215

(1) the operation and maintenance of a public utility; (2) amusements owned and operated by the municipality; and (3) any activity that is abnormally dangerous or ultrahazardous.

(c) The proprietary functions of a municipality do not include those governmental activities listed under Subsection (a).

HISTORY: Enacted by Acts 1987, 70th Leg., 1st C.S., ch. 2 (S.B. 5), § 3.02, effective September 2, 1987; am. Acts 1997, 75th Leg., ch. 152 (S.B. 1697), § 1, effective September 1, 1997; am. Acts 1999, 76th Leg., ch. 1170 (S.B. 104), § 2, effective June 18, 1999; am. Acts 2001, 77th Leg., ch. 1399 (H.B. 2580), § 1, effective June 16, 2001; am. Acts 2013, 83rd Leg., ch. 50 (H.B. 278), § 1, effective September 1, 2013.

NOTES:

1999 Note: Ch. 1170 applies beginning with the 1999-2000 school year. Acts 1999, 76th Leg., ch. 1170, § 3. * See Texas Litigation Guide, Ch. 290, Negligence; Ch. 293, Claims Against Governmental Entities; Ch. 310, Premises Liability. Applicability. — Acts 2013, 83rd Leg., ch. 50 (H.B. 278), § 3 provides: "The change in law made by this Act applies only to a cause of action that accrues on or after the effective date of this Act [September 1, 2013]. A cause of action that accrues before the effective date of this Act is governed by the law in effect immediately before that date, and that law is continued in effect for that purpose." 2013 amendment, added "including when used for space flight activities as defined by Section 100A.001" in (a)(10); and substituted "Subchapter E, Chapter 212" for "Subchapter A, Chapter 230" in (a)(36).

LexisNexis (R) Notes:

CASE NOTES

1. Trial court properly denied a city's plea to the jurisdiction in an inverse condemnation claim brought by property owners; the city's construction and operation of a landfill was a governmental function, subject to sovereign immunity; nevertheless, the trial court did not have jurisdiction over the property owners' request for injunctive relief involving future actions. City of Anson v. Harper, 216 S. W.3d 384, 2006 Tex. App. LEXIS 6055, 167 Oil & Gas Rep. 16 (Tex. App. Eastland 2006).

2. Plaintiffs theory of liability that a city was liable under the Texas Tort Claims Act (Act) and the recreational use statute for injuries to a child stemming from the city's willful, wanton, and/or grossly negligent conduct with respect to its duties and failure to repair playground equipment properly alleged a claim for which the Act, as limited by the recreational use statute, waived the city's sovereign immunity pursuant to Tex. Civ. Prac. & Rem. Code Ann. 0' Page 1

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Tex. Civ. Prac. & Rem. Code § 101.022 (2014)

§ 101.022. Duty Owed: Premise and Special Defects.

(a) Except as provided in Subsection (c), if a claim arises from a premise defect, the governmental unit owes to the claimant only the duty that a private person owes to a licensee on private property, unless the claimant pays for the use of the premises. (b) The limitation of duty in this section does not apply to the duty to warn of special defects such as excavations or obstructions on highways, roads, or streets or to the duty to warn of the absence, condition, or malfunction of traffic signs, signals, or warning devices as is required by Section 101.060. (c) If a claim arises from a premise defect on a toll highway, road, or street, the governmental unit owes to the claimant only the duty that a private person owes to a licensee on private property.

HISTORY: Enacted by Acts 1985, 69th Leg., ch. 959 (S.B. 797), § 1, effective September 1, 1985; am. Acts 2005, 79th Leg., ch. 281 (H.B. 2702), § 2.88, effective June 14, 2005.

NOTES:

Legislative Note. -- * See Texas Litigation Guide, Ch. 290, Negligence; Ch. 293, Claims Against Governmental Entities; Ch. 333, Libel and Slander. Applicability. -- Acts 2005, 79th Leg., ch. 281 (H.B. 2702), § 8.01 provides: "Section 101.022, Civil Practice and Remedies Code, as amended by this Act, applies only to a cause of action that accrues on or after the effective date of this Act. A cause of action that accrued before the effective date of this Act is governed by the law in effect at the time the cause of action accrued, and that law is continued in effect for that purpose." Page 1

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Tex. Civ. Prac. & Rem. Code § 101.025 (2014)

§ 101.025. Waiver of Governmental Immunity; Permission to Sue

(a) Sovereign immunity to suit is waived and abolished to the extent of liability created by this chapter. (b) A person having a claim under this chapter may sue a governmental unit for damages allowed by this chapter.

HISTORY: Enacted by Acts 1985, 69th Leg., ch. 959 (S.B. 797), § 1, effective September 1, 1985.

NOTES:

Legislative Note. -- * See Texas Litigation Guide, Ch. 290, Negligence; Ch. 293, Claims Against Governmental Entities; Ch. 310, Premises Liability.

LexisNexis (R) Notes:

CASE NOTES

1. In a corporation's action for damages against a municipal landlord for violations of the Deceptive Trade Practices Act, Tex. Bus. & Com. Code Ann. § 17.41 et seq., breach of express and implied warranties, and fraud in a real estate A5 Page 1

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LOCAL GOVERNMENT CODE TITLE 8. ACQUISITION, SALE, OR LEASE OF PROPERTY SUBTITLE C. ACQUISITION, SALE, OR LEASE PROVISIONS APPLYING TO MORE THAN ONE TYPE OF LOCAL GOVERNMENT CHAPTER 271. PURCHASING AND CONTRACTING AUTHORITY OF MUNICIPALITIES, COUNTIES, AND CERTAIN OTHER LOCAL GOVERNMENTS SUBCHAPTER I. ADJUDICATION OF CLAIMS ARISING UNDER WRITTEN CONTRACTS WITH LOCAL GOVERNMENT ENTITIES

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Tex. Local Gov't Code § 271.151 (2014)

§ 271.151. Definitions

In this subchapter: (1) "Adjudication" of a claim means the bringing of a civil suit and prosecution to final judgment in county or state court and includes the bringing of an authorized arbitration proceeding and prosecution to final resolution in accordance with any mandatory procedures established in the contract subject to this subchapter for the arbitration proceedings.

(2) "Contract subject to this subchapter" means: (A) a written contract stating the essential terms of the agreement for providing goods or services to the local governmental entity that is properly executed on behalf of the local governmental entity; or (B) a written contract, including a right of first refusal, regarding the sale or delivery of not less than 1,000 acre-feet of reclaimed water by a local governmental entity intended for industrial use. (3) "Local governmental entity" means a political subdivision of this state, other than a county or a unit of state government, as that term is defined by Section 2260.001, Government Code, including a: (A) municipality;

(B) public school district and junior college district; and Page 2 Tex. Local Gov't Code § 271.151

(C) special-purpose district or authority, including any levee improvement district, drainage district, irrigation district, water improvement district, water control and improvement district, water control and preservation district, freshwater supply district, navigation district, conservation and reclamation district, soil conservation district, communication district, public health district, emergency service organization, and river authority.

HISTORY: Enacted by Acts 2005, 79th Leg., ch. 604 (H.B. 2039), § 1, effective September 1, 2005; am. Acts 2013, 83rd Leg., ch. 1138 (H.B. 3511), § 2, effective June 14, 2013.

NOTES:

Applicability. -- Acts 2013, 83rd Leg., ch. 1138 (H.B. 3511), § 4(c) provides: "Sections 271.151(2) and 271.153, Local Government Code, as amended by this Act, apply to a claim that arises under a contract executed on or after the effective date of this Act [June 14, 2013]. A claim that arises under a contract executed before the effective date of this Act is governed by the law in effect on the date the contract was executed, and the former law is continued in effect for that purpose." 2013 amendment, added the (2)(A) designation; added (2)(B); and made a related change.

LexisNexis (R) Notes:

CASE NOTES

1. In a case involving a right of first refusal, summary judgment was properly granted to a navigation district on the issue of immunity because a contract between the district and two lessees was not governed by maritime law; therefore, under Texas law, the district was a governmental entity under Tex. Loc. Gov't Code Ann. § 271.151; as the district was immune, there was no need to consider whether summary judgment was properly granted on a breach of contract case. Brown Water Marine Serv. v. Aransas County Navigation Dist. No. 1, 2008 Tex. App. LEXIS 2955 (Tex. App. Corpus Christi Apr. 24 2008).

2. Court properly granted the city's motion for traditional summary judgment, because governmental immunity had not been waived, when the Tooke decision created a default principle of governmental immunity in contract cases that should be followed until either the Texas Legislature or the Texas Supreme Court specifically addressed the application of the proprietary-governmental dichotomy in contract cases. Wasson Interests, Ltd. v. City of Jacksonville, 2014 Tex. App. LEXIS 7377 (Tex. App.--Tyler July 9, 2014).

3. In a case in which a doctor alleged that a county hospital district breached its consulting agreement with him, the doctor could not rely on Tex. Loc. Gov't Code Ann. § 271.152 to establish the hospital district waived its sovereign immunity because he failed to present evidence that the contract was executed by the hospital district. Because the jurisdictional facts affirmatively negated the existence of subject matter jurisdiction, the trial court erred by denying the - hospital district's plea to the jurisdiction regarding the doctor's claim. Sabine County Hosp. Dist. v. Packard, 2012 Tex. App. LEXIS 2914 (Tex. App. Tyler Apr. 11 2012). Page 1

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LOCAL GOVERNMENT CODE TITLE 8. ACQUISITION, SALE, OR LEASE OF PROPERTY SUBTITLE C. ACQUISITION, SALE, OR LEASE PROVISIONS APPLYING TO MORE THAN ONE TYPE OF LOCAL GOVERNMENT CHAPTER 271. PURCHASING AND CONTRACTING AUTHORITY OF MUNICIPALITIES, COUNTIES, AND CERTAIN OTHER LOCAL GOVERNMENTS SUBCHAPTER I. ADJUDICATION OF CLAIMS ARISING UNDER WRITTEN CONTRACTS WITH LOCAL GOVERNMENT ENTITIES

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Tex. Local Gov't Code § 271.152 (2014)

§ 271.152. Waiver of Immunity to Suit for Certain Claims

A local governmental entity that is authorized by statute or the constitution to enter into a contract and that enters into a contract subject to this subchapter waives sovereign immunity to suit for the purpose of adjudicating a claim for breach of the contract, subject to the terms and conditions of this subchapter.

HISTORY: Enacted by Acts 2005, 79th Leg., ch. 604 (H.B. 2039), § 1, effective September 1, 2005.

NOTES:

Applicability. — Acts 2005, 79th Leg., ch. 604 (H.B. 2039), § 2 provides:"Sections 271.152, 271.153, and 271.154, Local Government Code, as added by this Act, apply to a claim that arises under a contract executed before the effective date of this Act only if sovereign immunity has not been waived with respect to the claim before the effective date of this Act. A claim that arises under a contract executed before the effective date of this Act and with respect to which sovereign immunity has been waived is governed by the law in effect on the date the contract was executed, and the former law is continued in effect for that purpose."

LexisNexis (R) Notes: A6 Page 1

City of Georgetown, Texas, Appellant v. Lower Colorado River Authority, Appellee

NO. 03-12-00648-CV

COURT OF APPEALS OF TEXAS, THIRD DISTRICT, AUSTIN

413 S.W.3d 803; 2013 Tex. App. LEXIS 10665

August 23, 2013, Filed

SUBSEQUENT HISTORY: Related proceeding at City [*805] In this interlocutory appeal, appellant City of Seguin v. Lower Colo. River Auth., 2014 Tex. App. of Georgetown (the City) challenges the trial court's order LEXIS 401 (Tex. App. Austin, Jan. 15, 2014) denying its plea to the jurisdiction based on governmental Petition for review dismissed by, Motion granted by, immunity. The underlying controversy concerns the Settled by City of Georgetown v. Lower Colo. River City's long-term contract to purchase electricity from Auth., 2014 Tex. LEXIS 438 (Tex., May 30, 2014) appellee, the Lower Colorado River Authority (the LCRA). The LCRA sought declaratory relief concerning PRIOR HISTORY: [**1] FROM THE DISTRICT the parties' rights and obligations under the contract, and COURT OF TRAVIS COUNTY, 250TH JUDICIAL the City filed a plea to the jurisdiction, asserting that the DISTRICT. NO. D-1-GN-12-002982, HONORABLE LCRA's pleadings fail to demonstrate a valid waiver of TIM SULAK, JUDGE PRESIDING. governmental immunity. Because we conclude that the City has no immunity from this suit, we affirm the trial DISPOSITION: Affirmed. court's order denying the City's plea to the jurisdiction.

BACKGROUND COUNSEL: For appellant: Mr. Lambeth Townsend, Mr. Jose De La Fuente, Mr. Daniel Gonzales, Ms. Amy M. According to its pleadings, the LCRA entered into Emerson, Lloyd, Gosselink, Rochelle & Townsend, PC, standard "Wholesale Power Agreements" with various Austin, TX. municipalities, including the City, in 1974. Under the terms of the Wholesale Power Agreement, the City would For appellee: Mr. John W. Rubottom, Mr. James N. purchase 100% of its [**2] electricity from the LCRA Rader, Lower Colorado River Authority, Associate and then resell that electricity to the City's retail General Counsel, Austin, TX; Mr. Kennon L. Wooten, customers through its municipal utility. The Wholesale Mr. Stephen E. McConnico, Ms. Jane M. N. Webre, Power Agreement is set to expire June 25, 2016, and the Scott, Douglass & McConnico, LLP, Austin, TX. City has given LCRA notice of its intent not to renew the contract. JUDGES: Before Chief Justice Jones, Justices Goodwin and Field. Dissenting Opinion by Justice Goodwin. [*806] The LCRA asserts that on June 28, 2012, the City sent a letter to the LCRA in which it alleged that the OPINION BY: Scott K. Field LCRA had breached the terms of the Wholesale Power Agreement by selling electricity to other customers at a OPINION lower rate. According to the LCRA, the letter stated that Page 2 413 S.W.3d 803, *806; 2013 Tex. App. LEXIS 10665, **2

the City would terminate the Wholesale Power S.W.3d 217, 226-27 (Tex. 2004). Agreement within thirty days unless the LCRA cured the alleged breach. On August 13, 2012, the City sent a Some of the issues in this case concern interpretation follow-up letter in which it declared that the Wholesale of statutes, which is a question of law that we review de Power Agreement was terminated. novo. See First Am. Title Ins. Co. v. Combs, 258 S.W.3d 627, 631 (Tex. 2008). When construing a statute, our In response, the LCRA filed this underlying action, primary objective is to ascertain and give effect to the seeking a declaratory judgment that it has not materially legislature's intent. Id. at 631-32. In determining breached the Wholesale Power Agreement.1 The City legislative intent, we first consider the plain language of filed a plea to the jurisdiction, asserting that the LCRA's the statute. GMC v. Bray, 243 S.W.3d 678, 685 (Tex. pleadings fail to affirmatively demonstrate a waiver of App.--Austin 2007, no pet.). When statutory text is clear, the City's governmental immunity. In its amended it is determinative of legislative intent, unless enforcing pleadings, the LCRA asserts that the City has no the plain meaning of the statute's words would produce governmental immunity because this case arises out of an absurd result. Entergy Gulf States, Inc. v. Summers, the [**3] City's proprietary function, rather than its 282 S.W.3d 433, 437 (Tex. 2009). [**5] Our analysis of governmental function. Alternatively, the LCRA asserts the statute is also informed by the presumption that "the that if the City has governmental immunity, that entire statute is intended to be effective" and that "a just immunity has been waived by statute. See Tex. Loc. Gov't and reasonable result is intended." Tex. Gov't Code § Code § 271.152 (waiving sovereign immunity for breach 311.021(2), (3). We may consider such matters as "the of contract claims "subject to the terms and conditions of object [*807] sought to be attained," "the circumstances this subchapter"). Following a hearing, the trial court under which the statute was enacted," legislative history, denied the City's plea to the jurisdiction. This and "common law or former statutory provisions, interlocutory appeal followed. See Tex. R. App. P. including laws on the same or similar subjects." Id. § 51.014(a)(8) (permitting interlocutory appeal from denial 311.023(1)-(4). of plea to jurisdiction). DISCUSSION 1 The LCRA also sought injunctive relief "commanding [the City] to desist and refrain from A municipality performs a governmental function taking any further action to prematurely terminate when it acts "as the agent of the State in furtherance of the [Wholesale Power Agreement]." The trial general law for the interest of the public at large." Gates court did not rule on the LCRA's request for v. City of Dallas, 704 S.W.2d 737, 738-39 (Tex. 1986) injunctive relief, and that claim is not part of this (internal quotations omitted), superseded by statute on interlocutory appeal. other grounds as stated in City of Terrell v. McFarland, 766 S.W.2d 809, 813 (Tex. App.--Dallas 1988, writ STANDARD OF REVIEW denied). Given that the municipality is effectively acting on behalf of the state when it performs a governmental A plea to the jurisdiction is a dilatory plea that function, it is imbued with the state's sovereign challenges the trial court's authority to determine the immunity, and therefore is entitled to governmental subject matter of a specific cause of action. See Bland immunity.2 Id. By contrast, "[p]roprietary functions are Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553-54 (Tex. those functions performed by a city, in its discretion, 2000). Governmental immunity from suit deprives a court primarily [**6] for the benefit of those within the of subject-matter jurisdiction and therefore [**4] is corporate limits of the municipality." Id. Because the properly asserted in a plea to the jurisdiction. State v. municipality is not acting on behalf of the state when it Lueck, 290 S.W.3d 876, 880 (Tex. 2009). Whether a trial performs proprietary functions, the municipality court has subject-matter jurisdiction is a question of law traditionally is not entitled to governmental immunity for that we review de novo. Westbrook v. Penley, 231 S.W.3d those functions, and thus has "the same duties and 389, 394 (Tex. 2007). When, as here, the plea to the liabilities as those incurred by private persons or jurisdiction challenges the pleadings, we construe the corporations." Id.; see also Bailey v. City of Austin, 972 pleadings liberally in favor of the plaintiff, and unless S.W.2d 180, 192-93 (Tex. App.--Austin 1998, pet. denied) challenged with evidence, we accept all allegations as (concluding that city's provision of health insurance to its true. Texas Dep't of Parks & Wildlife v. Miranda, 133 Page 3 413 S.W.3d 803, *807; 2013 Tex. App. LEXIS 10665, **6

employees is proprietary function for which unambiguously waive sovereign immunity). governmental immunity does not apply). [*808] The arguments in this case primarily 2 Courts frequently use the terms sovereign concern whether the proprietary-governmental dichotomy immunity and governmental immunity applies to contract claims. As we will explain, this issue interchangeably, but the terms technically involve involves two separate legal questions: (1) does the two distinct concepts. See Wichita Falls State proprietary-governmental dichotomy apply to contract Hosp. v. Taylor, 106 S.W.3d 692, 694 n.3 (Tex. claims under the common law and (2) if so, has the 2003). "Sovereign immunity refers to the State's legislature abrogated the common law? In making these immunity from suit and liability," which extends determinations, we first discuss the history and to "the various divisions of the state government, underlying rationale for treating proprietary functions including agencies, boards, hospitals, and differently than governmental functions. Next, we universities. Governmental immunity, on the consider whether the common law applies the other hand, protects political subdivisions of the proprietary-governmental dichotomy to contract claims. State, including counties, cities, and school Finally, we determine whether the legislature has districts." Id. (internal [**7] citations omitted). abrogated common-law precedent, thereby ending the Although this distinction does not affect our application of the dichotomy to contract claims. analysis in this case, it is worth noting that when we refer to the City's immunity, or lack thereof, History and [**9] rationale for we are referring to governmental immunity. See proprietary-governmental dichotomy id. Texas has long recognized sovereign immunity as The LCRA asserts that when the City contracted to the bedrock principle that "'no state can be sued in her purchase power as a municipal utility, the City performed own courts without her consent, and then only in the a proprietary function rather than a governmental manner indicated by that consent.'" See Tooke, 197 function. See Tex. Civ. Prac. & Rem. Code § S.W.3d at 331 (quoting Hosner v. DeYoung, 1 Tex. 764, 101.0215(b)(1) (defining "operation or maintenance of a 769 (1847)). This immunity extends to the various public utility" as proprietary function for purposes of divisions of the state government as well as its political Texas Tort Claims Act). Therefore, according to the subdivisions, such as the City. See supra n.2. LCRA, the City has no governmental immunity from this "[G]overnmental immunity has two components: suit, which arises out of its operation of a municipal immunity from liability, which bars enforcement of a utility. judgment against a governmental entity, and immunity from suit, which bars suit against the entity altogether." The City asserts that "the proprietary-governmental Tooke, 197 S.W.3d at 332. When a governmental entity function dichotomy is a creature of tort law" that does not enters into a contract it "necessarily waives immunity apply to contract claims. Specifically, the City argues that from liability, . . . but it does not waive immunity from because section 271.152 of the Local Government suit." Id. Thus, when governmental immunity applies, a Code--the statute that waives sovereign immunity for governmental entity may not be sued for breach of certain contract claims--does not mention the contract unless its immunity from suit has been waived. proprietary-governmental dichotomy, the legislature Id. We defer to the legislature to waive immunity from intended for the dichotomy not to apply to contract suit by statute or resolution. Wichita Falls State Hosp. v. claims. Therefore, according to the City, municipalities Taylor, 106 S.W.3d 692, 695-96 (Tex. 2003). The have governmental immunity [**8] for contract claims legislature's waiver of immunity [**10] from suit must regardless of whether the claim arises out of their be clear and unambiguous. Tooke, 197 S.W.3d at 332-33. proprietary or governmental functions. As a result, the These principles of immunity from suit and waiver of City asserts that it has governmental immunity from immunity are well established. LCRA's claims and that LCRA cannot demonstrate a clear and unambiguous waiver of the City's immunity. However, it is also well established that before a See Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. court considers whether governmental immunity has been 2006) (noting that legislature must clearly and waived, the court must determine whether governmental immunity exists in the first place. See, e.g., City of El Page 4 413 S.W.3d 803, *808; 2013 Tex. App. LEXIS 10665, **10

Paso v. Heinrich, 284 S.W.3d 366, 371-72 (Tex. 2009) 62 Tex. at 125). (explaining that ultra vires claims are not against state and therefore do not implicate sovereign immunity). The courts have traditionally been left to determine "[T]he distinction between waiving immunity and finding which municipal functions are proprietary and which are it nonexistent is a fine one that yields the same effect and, governmental. See, e.g., Gates, 704 S.W.2d at 739. '[d]ue to the risk that the latter could become a ruse for However, in 1987, the Texas Constitution was amended avoiding the Legislature, courts should be very hesitant to to give the legislature the authority to "define for all declare immunity nonexistent in any particular case.'" purposes those functions of a municipality that are to be Nueces Cnty. v. San Patricio Cnty. 246 S.W.3d 651, 652 considered governmental and those that are proprietary, (Tex. 2008) (quoting City of Galveston v. Texas, 217 including reclassifying a function's classification assigned S.W.3d 466, 471 (Tex. 2007)). Therefore, courts generally under prior statute or common law." Tex. Const. art. XI, § presume that governmental immunity applies. See id. 13(a). Thus, the legislature may, through statute, change With these principles in mind, we turn to the history of the common-law classifications of municipal functions, the proprietary-governmental dichotomy. effectively "grant[ing] municipalities immunity [**13] from certain suits that could have been maintained at Over 125 years ago, the Texas Supreme Court common law." City of Tyler v. Likes, 962 S.W.2d 489, considered the extent [**11] to which governmental 503 (Tex. 1997). immunity applies to municipalities. City of Galveston v. Posnainsky, 62 Tex. 118 (1884). In Posnainsky, a father The legislature has exercised its authority to sued a municipality for injuries resulting from his minor reclassify proprietary functions as governmental child's fall into an uncovered drain on a public street. Id. functions almost exclusively in the Tort Claims Act.3 See at 122-23. The court held that because the municipality Tex. Civ. Prac. & Rem. Code § 101.0215; see also Likes, constructed and maintained the streets for its "own 962 S.W.2d at 502 (noting that Tort Claims Act advantage or emolument," it was not immune from suit reclassified maintenance of storm sewers as for [*809] negligently maintaining those streets. Id. at governmental function even though considered 131. As the court explained, when a municipality proprietary function at common law). As noted above, the "exercises powers exclusively public in their character, Tort Claims Act specifically defines the "operation and forced upon it without its consent, simply because the maintenance of a public utility" as a proprietary function, state can thus, through such local agencies, more easily thereby affirming its common-law classification, at least and effectively discharge duties essentially its own, it is with respect to tort claims. See Tex. Civ. Prac. & Rem. but proper that no action should be maintained against" Code § 101.0215(b)(1); San Antonio Indep. Sch. Dist. v. the municipality unless the state has waived immunity City of San Antonio, 550 S.W.2d 262, 264 (Tex. 1976) from suit. Id. at 125. However, when municipalities (noting that operation of public utility is proprietary "exercise power not of this character, voluntarily function at common law). assumed--powers intended for the private advantage and 3 The legislature has also specified that certain benefit of the locality and its inhabitants,--there seems to public operations and government agencies be no sufficient reason why they should be relieved from perform only governmental functions. See, e.g., that liability to suit and measure of actual damage to Tex. Transp. Code § 452.0561(b) (stating that which an individual [**12] or private corporation" operations of public transportation entity are would be held. Id. governmental functions); [**14] Tex. Water Posnainsky established what has become the Code § 67.0105(b) ("The furnishing of a water proprietary-governmental dichotomy. When a supply and fire hydrant equipment by a municipality exercises powers, public in nature, at the governmental entity or a volunteer fire direction of the state, it performs a governmental function department. . . is an essential governmental for which it has governmental immunity. But when a function . . . ."); Tex. Spec. Dist. Code § municipality acts within its discretion, primarily for the 3503.002(b) (stating that operations of benefit of those within its corporate limits, it performs a "TexAmericas Center" are governmental proprietary function for which it has no immunity. See functions for all purposes). The City's contract Nueces Cnty., 246 S.W.3d at 652-53 (citing Posnainsky, with the LCRA does not implicate any of these Page 5 413 S.W.3d 803, *809; 2013 Tex. App. LEXIS 10665, **14

provisions, and therefore these statutes are not at 343-44. applicable to the case before us. However, the supreme court's opinion in Tooke has The common-law rule and Tooke v. City of Mexia brought that uniform assumption into question. In Tooke, the supreme court stated that the Posnainsky applied the proprietary-governmental "proprietary-governmental dichotomy has been used to dichotomy to a tort [*810] claim. See 62 Tex. at 125. determine a municipality's immunity from suit for Prior to Tooke, 197 S.W.3d at 343-44, the Texas appellate tortious conduct. . . . [b]ut we have never held that this courts--including this Court--also unanimously applied distinction determines whether immunity from suit is the proprietary-governmental dichotomy to claims for waived for breach of contract claims . . . ,"5 197 S.W.3d contract damages. See Bailey, 972 S.W.2d at 192.4 at 343. The court explained that it "need not determine Although some of these opinions acknowledged that the that issue" because the case involved a governmental dichotomy was originally applied to tort claims, the function, and thus, even assuming that the dichotomy opinions mostly assumed, without explanation, that "the applied, the municipality had governmental immunity. Id. dichotomy applies with equal force to contract claims." Nevertheless, Tookearguably called into question the See City of Mexia v. Tooke, 115 S.W.3d 618, 624-25 (Tex. vitality of the longstanding assumption that the App.--Waco 2003), aff'd, 197 S.W.3d at 347. proprietary-governmental dichotomy applies with equal force to contract claims as it does to tort claims. See East 4 See also Temple v. City of Houston, 189 Houston Estate Apartments, L.L.C. v. City of Houston, S.W.3d 816, 819-20 (Tex. App.--Houston [1st 294 S.W.3d 723, 731-32 (Tex. App.--Houston [1st Dist.] Dist.] 2006, no pet.); [**15] City of Roman 2009, no pet.) (discussing appellate courts' post-Tooke Forest v. Stockman, 141 S.W.3d 805, 811 (Tex. treatment of proprietary-governmental [**17] dichotomy App.--Beaumont 2004, no pet.); City of Mexia v. for contract claims). However, until the supreme court Tooke, 115 S.W.3d 618, 624-25 (Tex. App.--Waco answers this question, we rely on this Court's precedent, 2003), aff'd, 197 S.W.3d 325, 347 (Tex. 2006); as well as the [*811] nearly unanimous opinions of our Williams v. City of Midland, 932 S.W.2d 679, sister courts, to conclude that the 683-84 (Tex. App.--El Paso 1996, no writ); City of proprietary-governmental dichotomy applies to contract Houston v. Southwest Concrete Constr., Inc., 835 claims under the common law. S.W.2d 728, 732-33 (Tex. App.--Houston [14th Dist.] 1992, writ denied); City of Dallas v. 5 Immediately following this sentence, the court Moreau, 718 S.W.2d 776, 779-80 (Tex. in Tooke cited Gates v. City of Dallas, a previous App.--Corpus Christi 1986, writ ref'd n.r.e.); supreme court opinion in which the court noted International Bank of Commerce of Laredo v. that "[c]ontracts made by municipal corporations Union Nat. Bank of Laredo, 653 S.W.2d 539, 546 in their proprietary capacity have been held to be (Tex. App.--San Antonio 1983, writ ref'd n.r.e.); governed by the same rules as contracts between Blythe v. City of Graham, 287 S.W.2d 527, 530 individuals." See Tooke, 197 S.W.3d at 343 n.89 (Tex. App.--Fort Worth 1956, writ ref'd n.r.e.); (citing Gates, 704 S.W.2d 737, 738-39 (Tex. Boiles v. City of Abilene, 276 S.W.2d 922, 925 1986)). Given that the disposition in Gates (Tex. App.--Eastland 1955, writ ref'd); City of appears to have required an application of the Crosbyton v. Texas-New Mexico Util. Co., 157 proprietary-governmental dichotomy to a contract S.W.2d 418, 420-21 (Tex. App.--Amarillo 1941, claim, it is not entirely clear what the court in writ ref'd w.o.m.); Texas One P'ship v. City of Tooke meant when it said, in dicta, that it had Dallas, No. 05-92-01097-CV, 1993 WL 11621, at never held that the dichotomy applies to such *3 (Tex. App.--Dallas Jan. 15, 1993, writ denied) claims. See id.; see also City of San Antonio ex. (not designated for publication). The parties do rel. City Pub. Serv. Bd. v. Wheelabrator Air not cite to, and we could not find, any cases from Pollution Control, Inc., 381 S.W.3d 597, 604 the Texarkana or Tyler [**16] Courts of Appeals (Tex. App.--San Antonio 2012, pet. filed) applying or refusing to apply the (concluding Tooke brings Gates into question). proprietary-governmental dichotomy to a contract Nevertheless, [**18] we will take at face value claim prior to Tooke v. City of Mexia, 197 S.W.3d the supreme court's conclusion that it has never Page 6 413 S.W.3d 803, *811; 2013 Tex. App. LEXIS 10665, **18

expressly held that the proprietary-governmental arguments can be used as a "ruse" to circumvent dichotomy applies to contract claims. the legislature. See Nueces Cnty. v. San Patricio Cnty., 246 S.W.3d 651, 652 (Tex. 2008). While we Prior to Tooke, the appellate courts unanimously agree that courts should not make this applied the proprietary-governmental dichotomy to determination lightly, the contract claims. See supra n.3. Following Tooke, several proprietary-governmental dichotomy has existed appellate courts, including this Court, have assumed for over 125 years and has been applied to without deciding that the dichotomy continues to apply to contract claims for at least 70 years. See City of contract claims. See, e.g., East Houston Estate Galveston v. Posnainsky, 62 Tex. 118 (1884); City Apartments, L.L.C., 294 S.W.3d at 731-32; Smith v. City of Crosbyton, 157 S.W.2d at 420-21. Therefore, of Blanco, No. 03-08-00784-CV, 2009 Tex. App. LEXIS we disagree with the City's assertion that applying 7889, 2009 WL 3230836, at *3 (Tex. App.--Austin Oct. 8, the proprietary-governmental dichotomy to 2009, no pet.) (mem. op.). At least one of our sister courts contract claims is a ruse to avoid the legislature; has continued to expressly apply the rather, it is a reasonable application of proprietary-governmental dichotomy to contract claims jurisprudence that is nearly as old as the state post-Tooke. See Casso v. City of McAllen, No. itself. See Posnainsky, 62 Tex. at 127-28. 13-08-00618, 2009 Tex. App. LEXIS 2049, 2009 WL 781863, at *5-7 (Tex. App.--Corpus Christi Mar. 26, In its brief, the City primarily relies on the San 2009, pet. denied) (mem. op.) (concluding municipality's Antonio Court of Appeals' recent holding in City of San provision of health insurance to its employee is Antonio ex. rel. City Public Service Board v. proprietary function for which it had no immunity from Wheelabrator Air Pollution Control, Inc., 381 S.W.3d contract claim). These opinions did not engage in 597, 603-05 (Tex. App.--San Antonio 2012, pet. filed). In substantial analysis of why the dichotomy was equally that case, the court held that the legislature's failure to applicable to contracts, perhaps because they did not include the proprietary-governmental dichotomy in "the [**19] think such analysis was necessary. contract-claim scheme" meant that the dichotomy did [**21] not apply. Id. at 605. In reaching this conclusion, Although Tooke brought this issue into question, it the court did not expressly state whether the legislature did not suggest, and we have not found, any principled abrogated the common-law rule that would have applied reason why the proprietary-governmental dichotomy the dichotomy to contract claims. However, the court should apply to tort claims but not contract claims under noted that Tooke brought Gates--a previous supreme the common law.6 See 197 S.W.3d at 343-44. Without [*812] court opinion that applied the such a principled reason or guidance from the supreme proprietary-governmental dichotomy to a contact court, we are reluctant to overturn our own precedent or claim--into question because Tooke "used a compare disagree with persuasive authority from the majority of signal when citing Gates right after explicitly stating it our sister courts on the issue. See Grapevine Excavation, has never held that the proprietary/governmental Inc. v. Maryland Lloyds, 35 S.W.3d 1, 5 (Tex. 2000) distinction applies to determine whether immunity is ("Adhering to precedent fosters efficiency, fairness, and waived for breach of contract claims. . . " Wheelabrator, legitimacy."); see also Bailey, 972 S.W.2d at 192; supra 381 S.W.3d at 604 (citing Tooke, 197 S.W.3d at 343 n.3. The proprietary-governmental dichotomy exists n.89). To the extent Wheelebrator's analysis suggests that because we have determined that when a municipality Tooke changed the common law, we respectfully does not act on behalf of the state, it is not imbued with disagree. the state's immunity. Thus, the underlying rationale for the dichotomy is the relationship, or lack thereof, We agree that Tooke's citation to Gates could be read between the municipality and the state, not the to mean that Gates did not expressly hold that the relationship between the municipality and the party proprietary-governmental dichotomy applies to contract bringing suit. See Posnainsky, 62 Tex. at 126-128. claims, and thus there is no binding precedent from the supreme court that answers this question. See supra n.4. 6 The City argues that we should be hesitant to Nevertheless, we do not agree with Wheelebrator's conclude that governmental immunity does intimation that Tooke changed the common law or [**20] not exist in this context because such somehow called the holding of Gates into question. Page 7 413 S.W.3d 803, *812; 2013 Tex. App. LEXIS 10665, **22

[**22] By its own terms, Tooke assumed without dichotomy [**24] no longer applies to contract claims. deciding that the proprietary-governmental dichotomy The City again relies on the analysis in Wheelebrator, in applied to contract claims and therefore did not overrule which the San Antonio Court of Appeals stated the any prior precedent. See 197 S.W.3d at 343. Furthermore, following: the underlying analysis in Tooke primarily concerned whether the phrase "plead and be impleaded" within the The Legislature easily could have local government code was a clear and unambiguous included the proprietary/governmental waiver of sovereign immunity. See id. at 342-43. As we dichotomy it used in the tort-claims have explained, the proprietary-governmental dichotomy context [*813] in the contract-claim concerns whether a municipality has governmental scheme, but chose not do so. As it is solely immunity in the first place, not whether that immunity the Legislature's role to clearly and has been waived. Therefore, Tooke's analysis of waiver of unambiguously waive governmental immunity has little bearing on the immunity from suit, and it has not done so proprietary-governmental dichotomy, and the more for quantum meruit claims, we hold [the relevant precedents are those cases addressing whether municipality] is immune from suit on governmental immunity exists in the first instance. See, Wheelebrator's quantum meruit claim. e.g., Heinrich, 284 S.W.3d at 371-72; Nueces Cnty. 246 S.W.3d at 652-53. See 381 S.W.3d at 605 (internal quotation omitted). Because we conclude that this analysis incorrectly places For the foregoing reasons, we adhere to our the burden on the legislature to affirmatively adopt the precedent and conclude that the proprietary-governmental common-law rule, we respectfully disagree. dichotomy does apply to contract claims under the common law. See Bailey, 972 S.W.2d at 192. Having We are mindful of the fact that although "silence can made this determination, we next consider whether the be significant . . . . legislatures do not always mean to say legislature has abrogated that common-law [**23] rule. something by silence. Legislative silence may be due to mistake, oversight, lack of consensus, implied delegation Legislative intent to courts or agencies, or an intent to avoid unnecessary repetition." PPG Indus., Inc. v. JMB/Houston Ctr. In its brief, the City argues that the legislature's Partners Ltd. P'ship, 146 S.W.3d 79, 84 (Tex. 2004). failure to expressly adopt the propriety-governmental Therefore, in order to give effect [**25] to the dichotomy for contract claims indicates that the legislature's intent, we must utilize other tools of statutory dichotomy does not apply. As we have noted, the construction. See Tex. Gov't Code § 311.023. In legislature has the authority to reclassify a municipality's particular, we consider the common law's treatment of the functions as either proprietary or governmental, thereby proprietary-governmental dichotomy prior to the abrogating their common-law classifications. See Tex. adoption of section 271.152, as well as the legislative Const. art. XI, § 13(a). The legislature has exercised this history and purpose behind that section's adoption. See id. authority almost exclusively in the Tort Claims Act, in § 311.023(3)-(4); Tex. Loc. Gov't Code § 271.152. which it provided non-exhaustive lists of proprietary and governmental functions. See Tex. Civ. Prac. & Rem. Section 271.152 was signed into law on June 17, Code § 101.0215; supra n.3. Section 271.152 of the Local 2005, just over one year before the supreme court issued Government Code--the section that waives local its opinion in Tooke. See Act of May 23, 2005, 79th Leg., governmental entities' immunity from suit for certain R.S., ch. 604, §§ 1-2, 2005 Tex. Gen. Laws 1548, 1549; contract claims--does not reference the see also Tooke, 197 S.W.3d at 325. At the time the proprietary-governmental dichotomy. Given that chapter legislature considered and adopted section 271.152, the 271 does not mention the proprietary-governmental appellate courts unanimously applied the dichotomy in any respect, there is no plain statutory text proprietary-governmental dichotomy to contract claims in from which we can determine whether the legislature the same manner that they applied the dichotomy to torts. intended to abandon the dichotomy for contract claims. See supra n.3. We presume that the legislature was aware of the state of the common law when it adopted section The City asserts that we should take the legislature's 271.152. See Shook v. Walden, 304 S.W.3d 910, 917 (Tex. silence to mean that the proprietary-governmental Page 8 413 S.W.3d 803, *813; 2013 Tex. App. LEXIS 10665, **25

App.--Austin 2010, no pet.). The legislature did not various contract claims. See Clear Lake City express any disagreement with that precedent; therefore Water Auth. v. MCR Corp., No. 01-08-00955-CV, we presume that the legislature did not intend to abrogate 2010 Tex. App. LEXIS 2194, 2010 WL 1053057, [**26] the common law. See Cash Am. Int'l Inc. v. at *9 n.6 (Tex. App.--Houston [14th Dist.] March Bennett, 35 S.W.3d 12, 16 (Tex. 2000) ("Abrogating 11, 2010, pet. denied) [**28] (mem. op.). common-law claims is disfavored and requires clear repugnance between the common law and statutory Finally, as we have explained, the causes of action.") (internal quotations omitted). proprietary-governmental dichotomy concerns whether Furthermore, although the legislature could have repeated governmental immunity exists in the first place, not the list of proprietary and governmental functions from whether it has been waived. Therefore, the statutory the Tort Claims Act in some part of chapter 271 of the provision that waives governmental immunity in chapter Local Government Code, it could have reasonably 271 does not logically implicate the concluded that such repetition was unnecessary. See Tex. proprietary-governmental dichotomy, which applies Civ. Prac. & Rem. Code § 101.0215; PPG Indus., Inc., before consideration of waiver. As a result, the legislature 146 S.W.3d at 84 (noting legislative silence may indicate could have reasonably believed it did not need to reiterate intent to avoid unnecessary repetition); see also Tooke, the validity of the dichotomy in section 271.152. This 197 S.W.3d at 343-44 (concluding that there is "no reason interpretation is directly supported by section 271.158, in to think that the classification [of proprietary and which the legislature expressly stated that nothing in governmental functions] would be different under the section 271.152 "shall constitute a grant of immunity to common law "). suit to a local governmental entity."

Similarly, the history behind section 271.152 Therefore, we find that Wheelebrator's interpretation indicates that it was adopted to expand, rather than limit, of the legislature's silence is inconsistent with legislative plaintiffs' ability to sue municipalities for contract history and the purpose of section 271.152. We conclude damages. As section 271.158 of the Local Government that the legislature did not intend section 271.152 to Code makes clear, nothing in section 271.152 "shall abrogate the common law's treatment of the constitute a grant of immunity to suit to a local proprietary-governmental dichotomy. Having concluded governmental entity." [**27] This is consistent with the that the common law applies that dichotomy to contract bill analysis for section 271.152, which states that it claims, and that the operation of a municipal utility is a "clarifies and re-expresses the legislature's intent that all proprietary function, we further [**29] conclude that the local governmental entities that are given the statutory City was acting in its proprietary capacity when it entered authority to enter into contracts shall not be immune from into its contract with the LCRA. See Tex. Civ. Prac. & suits arising from contracts, subject to the limitations set Rem. Code § 101.0215(b)(1) (listing operation and forth in C.S.H.B. 2039." House Comm. On Civil maintenance of municipal utility as proprietary function); Practices, [*814] Bill Analysis, Tex. H.B. 2039, 79th Tooke, 197 S.W.3d at 344 (using classification of Leg., R.S. 2005. Thus, the legislative history strongly municipal function in Tort Claims Act in application to indicates that section 271.152 was adopted to expand--or contract claim). Therefore, the City has no governmental at a minimum not reduce--access to the courthouse.7 It immunity from the LCRA's claims, and the trial court did would be entirely inconsistent with this purpose to treat not err in denying the City's plea to the jurisdiction on section 271.152 as an abrogation of the this basis.8 proprietary-governmental dichotomy for contract claims. 8 Having concluded that the City has no See Likes, 962 S.W.2d at 503 (noting that when governmental immunity, we need not address the legislature reclassifies proprietary function as LCRA's alternative argument that the City's governmental function, it expands governmental immunity has been waived. immunity beyond common law). CONCLUSION 7 As our sister court explained, section 271.152 was adopted to overrule various appellate court We affirm the trial court's order denying the City's cases that found that governmental entities' plea to the jurisdiction. immunity from suit had not been waived for Page 9 413 S.W.3d 803, *814; 2013 Tex. App. LEXIS 10665, **29

Scott K. Field, Justice The majority's analysis of the proprietary-governmental dichotomy also glosses over Before Chief Justice Jones, Justices Goodwin and LCRA's pleadings. In its pleadings, LCRA does not Field allege a breach of contract claim but seeks declaratory Dissenting Opinion by Justice Goodwin relief. See Tex. Civ. Prac. & Rem. Code §§ 37.001-.011 (UDJA); see, e.g., East Houston Estate Apartments, Affirmed L.L.C. v. City of Houston, 294 S.W.3d 723, 731 (Tex. App.--Houston [1st Dist.] 2009, no pet.) (noting that Filed: August 23, 2013 courts of appeals have "applied the DISSENT BY: Melissa Goodwin governmental-proprietary dichotomy to breach of contract cases"). The UDJA "does not enlarge a trial DISSENT [**31] court's jurisdiction." City of El Paso v. Heinrich, 284 S.W.3d 366, 370 (Tex. 2009). Except for suits Because I would conclude that the Lower Colorado challenging statutes or ordinances, the UDJA does not River Authority (LCRA) failed to allege a valid waiver of waive governmental entities' immunity from suit. See id.; governmental immunity from suit by the City of IT-Davy, 74 S. W.3d at 855-56; Multi-County Water Georgetown (the City), I respectfully dissent. See Supply, 321 S.W.3d at 907 (noting that UDJA "is not a McCandless v. Pasadena Indep. Sch. Dist., No. general waiver of governmental immunity" and that "[b]y 03-09-00249-CV, 2010 Tex. App. LEXIS 2383, 2010 WL entering into a contract, a governmental entity waives 1253581, at *3 (Tex. App.--Austin Apr. 2, 2010, no pet.) immunity from liability but does not waive immunity (mem. op.) ("Plaintiff bears the burden to affirmatively from suit"); Lower Colorado River Auth. v. Riley, No. demonstrate the trial court's jurisdiction by alleging a 10-10-00092-CV, 2011 Tex. App. LEXIS 10236, 2011 WL valid waiver of immunity, [**30] which may be either 6956136, at *2 (Tex. App.--Waco Dec. 28, 2011, no pet.) by reference to a statute or to express [*815] legislative (mem. op.) (UDJA "not general waiver of sovereign permission." (citing Texas Dep't of Transp. v. Jones, 8 immunity"). Thus, LCRA's UDJA claims do not satisfy S.W.3d 636, 637 (Tex. 1999))). its burden to allege a valid waiver of immunity from suit. See, e.g., IT-Davy, 74 S.W.3d at 855-56, 860 (stating that The majority concludes that the "City has no immunity generally protects a governmental entity from immunity from this suit" based upon its conclusion that declaratory-judgment suits that seek to establish a "the City was acting in a proprietary capacity when it contract's validity or enforce performance under the entered into its contracts with the LCRA." This contract "because such suits attempt to control state conclusion, however, ignores the well-established action"). doctrine of governmental immunity that protects political subdivisions of the state, including cities, from suit. See LCRA's pleadings also fail to establish that section Ben Bolt v. Texas Political Subdivisions, 212 S.W.3d 320, 271.152 of the Local Government Code applies to waive 324 (Tex. 2006); Tooke v. City of Mexia, 197 S.W.3d 325, the City's immunity from suit: the LCRA expressly states 328 (Tex. 2006); Multi-County Water Supply Corp. v. it is not bringing a breach of contract claim for money City of Hamilton, 321 S.W.3d 905, 907 (Tex. damages.1 See Tex. Loc. Gov't Code §§ 271.151-.160 App.--Houston [14th Dist.] 2010, pet. denied). "A (waiving immunity of local governmental entities for political subdivision enjoys governmental immunity from [*816] breach of contract claims that seek to recover suit to the extent that immunity has not been abrogated balance owed under a contract for goods or services and by the Legislature." Ben Bolt, 212 S. W.3d at 324 (citing limiting recoverable damages); McCandless, 2010 Tex. Texas Natural Res. Conserv. Comm'n v. IT-Davy, 74 App. LEXIS 2383, 2010 WL 1253581, at *3 (concluding S.W.3d 849, 853 (Tex. 2002)); Multi--County Water "without a properly pleaded breach-of-contract [**32] Supply, 321 S.W.3d at 907 ("Immunity from suit deprives action, section 271.152 does not waive governmental the trial court of subject-matter jurisdiction and bars an immunity"); cf. Ben Bolt, 212 S.W.3d at 323, 328 action against the governmental unit in the absence of (concluding that limited statutory waiver in section express, clear, and unambiguous consent to suit." (citing 271.151 applied to insurance coverage dispute in Tex. Gov't Code § 311.034; Tooke, 197 S.W.3d at "declaratory judgment action seeking a determination that 332-33)). the loss was a covered occurrence under the insurance Page 10 413 S.W.3d 803, *816; 2013 Tex. App. LEXIS 10665, **32

agreement's terms"); City of San Antonio v. Wheelabrator at 637 (plaintiff's burden to allege valid waiver of Air Pollution Control, Inc., 381 S.W.3d 597, 599-600 immunity). I would conclude that LCRA failed to do so.2 (Tex. App.--San Antonio 2012, pet. filed) (plaintiff seeking money damages under a breach of contract claim 2 I also cannot join the majority's analysis of or, alternatively, a quantum meruit claim). LCRA does section 271.152 of the Local Government Code, not seek to recover the balance owed under a contract. the section expressly waiving immunity from suit See Tex. Loc. Gov't Code § 271.153 (listing recoverable for certain contract claims. See Tex. Loc. Gov't damages). Code § 271.152. Section 271.151(2) defines a "contract subject to this subchapter" to mean "a 1 In its pleadings, LCRA states: "it merely seeks written contract stating the essential terms of the to construe LCRA's obligations under a state agreement for providing goods or services to the statute and a contract and does not otherwise local governmental entity that is properly attempt to control Defendants or establish their executed on behalf of the local governmental liability for money damages.... LCRA does not entity." Id. §271.151(2). Contracts properly seek to validate the contract, impose liability on executed by a local governmental entity, such as a Defendants, or enforce their performance LCRA's city, whether in its governmental or proprietary declaratory-action does not seek to establish that capacity, fall within the plain language of a the City owes LCRA money or that the City "contract subject to this subchapter." See id. previously breached its contractual obligations." Melissa Goodwin, Justice Although a governmental entity waives its immunity from liability by entering into contracts, it was LCRA's Before Chief Justice Jones, Justices Goodwin and burden to allege a valid waiver of immunity from suit. Field See Ben Bolt, 212 S.W.3d at 324 ("By entering into a Filed: August 23, 2013 contract, the State waives its immunity from liability [**33] but not its immunity from suit."); Jones, 8 S.W.3d A7 CAUSE NO. CV-14-41722

CITY OF BONHAM IN THE DIS

Plaintiff,

vs. FANNIN COUNTY, TEXAS

SIDNEY B. HALE, JR

Defendant. 336th JUDICIAL DISTRICT

PLAINTIFF'S FIRST AMENDED PETITION FOR DECLARATORY JUDGMENT

NOW COMES Plaintiff, City of Bonham and files this First Amended Petition against

Defendant, Sidney B. Hale, Jr. ("Hale" or "Defendant"), seeking declaratory judgment relief, and

in support thereof would show as follows:

I. DISCOVERY PLAN

1. This matter shall proceed under a Level 2 Discovery Plan.

II. JURISDICTION AND VENUE

2. This Court has jurisdiction over this matter pursuant to the Texas Declaratory

Judgment Act. Venue is appropriate in this Court because the subject property is located within

the boundaries of Fannin County, Texas.

III. PARTIES

3. Plaintiff is the owner of the property which is the subject of this lawsuit.

4. Defendant is a resident of Fannin County, Texas and may be served at 910 E. 11 th

Street, Bonham, Fannin County, Texas 75418.

IV. FACTS

5. City of Bonham owns a Quonset hangar on the grounds of the City of Bonham

Airport (the "Quonset Hangar"). By lease dated on or about June 18, 1984, Hale leased the

PLAINTIFF'S FIRST AMENDED PETITION FOR DECLARATORY JUDGMENT AND INJUNCTION PAGE 1 • • Quonset Hangar from the City of Bonham ("the Lease"). A true and correct copy of The Lease

is attached hereto as Exhibit "A." Paragraph 4 of the lease incorporates into the Lease the terms

of the Rules and Regulations of the Bonham Municipal Airport, attached hereto as Exhibit "B."

6. The Lease by its terms expired 5 years after it was first signed. However, both

parties continued performing under the Lease on a month-to-month basis.

7. On February 13, 2012, The City Council of the City of Bonham adopted new

Airport Rules and Regulations (the "2012 Airport Rules and Regulations"), a true and correct

copy of which are attached hereto as Exhibit "C." Section 8 of the Airport Rules and

Regulations implies knowledge of them to people using the Bonham Municipal Airport. Section

7-6 contains language eliminating any liability of the City of Bonham for any damage to persons

or property.

8. After passage of the 2012 Airport Rules and Regulations, both parties continued

to perform under the Lease.

9. On December 6, 2013, a severe ice storm impacted the Bonham Municipal

Airport, causing widespread damage (the "Incident"). The roof of the Quonset Hangar collapsed

as a result of the Incident. Defendant claims over $400,000.00 in damages from City of Bonham

as a result of the collapse, notwithstanding that City of Bonham has pointed out the Hold

Harmless language in the 2012 Airport Rules and Regulations eliminating any claim he might

have.

10. On June 4, 2014, Hale's counsel sent a demand letter making a claim against

Plaintiff under the Texas Tort Claims Act. This letter is attached hereto as Exhibit D.

PAGE 2 PLAINTIFFS FIRST AMENDED PETITION FOR DECLARATORY JUDGMENT AND INJUNCTION • 11. Plaintiff has exhausted its attempts to secure Defendant's compliance with the

terms of the Lease and 2012 Airport Rules and Regulations, and is without further remedy, save

and except the intervention of this Court.

V. CAUSE OF ACTION — REQUEST FOR DECLARATORY JUDGMENT

12. This action is being brought pursuant to Chapter 37 of the Texas Civil Practice

and Remedies Code. Section 37.004 of that Chapter states, in relevant part, that "A person

interested under a... written contract... or whose rights, status or other legal relations are affected

by a ...contract...may have determined any question of construction or validity arising under the

...contract...and obtain a declaration of rights, status or other legal relations thereunder."

13. In this matter, Defendant takes the position that he is not bound by the terms of

the Lease and, specifically, the Hold Harmless provision of the 2012 Airport Rules and

Regulations.

14. In contrast, the City of Bonham asserts that the Hold Harmless language does

apply either as a part of the Lease under principles of contract construction, under the doctrine of

ratification, or under the doctrine of subordination of contractual rights to local rules, laws and

ordinances.

15. Sovereign immunity protects governmental entities from lawsuits for money

damages. Texas Natural Res. Conservation Comm 'n v. IT-Davy, 74 S.W.3d 849, 853 (Tex.

2002). Political subdivisions of the state, including cities, are entitled to governmental immunity

unless it has been waived. Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 694 n. 3 (Tex.

2003). Sovereign immunity encompasses immunity from suit, which bars a suit unless the

governmental entity has consented, and immunity from liability, which protects the entity from

PAGE 3 PLAINTIFF'S FIRST AMENDED PETITION FOR DECLARATORY JUDGMENT AND INJUNCTION • • judgments even if it has consented to the suit. Texas Dept of Transp. v. Jones, 8 S.W.3d 636,

638 (Tex. 1999).

16. Section 101.021(2) of the Texas Tort Claims Act (The "Act") provides that a

governmental unit is liable for "personal injury and death" arising out of the condition or use of

tangible personal or real property. Property damage, as Hale claims here, is not recoverable.

And while Section 101.0215(10) of the Act does include airports as a governmental function of a

municipality, that liability must still arise out of Section 101.021. See, e.g., City of Kemah v.

Vela, 149 S.W.3d 199, 203-04, n. 1 (Tex. App.—Houston [14th Dist.] 2004, pet. denied).

17. Moreover, even if sovereign immunity had been waived, Hale would be limited in

his damages. Under the terms of the Lease, he would not be able to maintain a claim for any

damages. Moreover, under Section 101.023(d) of the Act, liability for property damages against

a municipality is limited to $100,000.

18. This is a live, genuine controversy because the determination of this issue directly

affects the ongoing relationship between the parties.

19. Plaintiff requests the Court enter the following judicial declarations:

(a) The Lease adopts the 2012 Airport Rules and Regulations.

(b) By the terms of section 7-6 the 2012 Airport Rules and Regulations, Hale

has no claim against City of Bonham as a result of the Incident.

(c) Plaintiff is immune from suit under the concept of sovereign immunity.

VI. REQUEST FOR ATTORNEY'S FEES

20. Plaintiff requests that this Court award Plaintiff its reasonable costs and attorney's

fees pursuant to the Texas Declaratory Judgment Act and Chapter 38 of the Texas Civil Practice

and Remedies Code.

PLAINTIFFS FIRST AMENDED PETITION FOR DECLARATORY JUDGMENT AND INJUNCTION PAGE 4

A7 • • VII. CONDITIONS PRECEDENT

21. All conditions precedent to Plaintiff being entitled to bring this action and recover

the relief requested herein have been performed, have occurred or have been waived.

VIII. PRAYER

WHEREFORE, Premises Considered, Plaintiff respectfully requests that the Court enter

the judicial declarations requested hereinabove and award Plaintiff its reasonable and necessary

costs and attorneys fees, and for such other relief to which Plaintiff may be justly entitled.

Respectfully submitted,

HELMES & GREENE, LLC

John Reen Texas St ar No. 00789777 jreenan@ lmsgreene.com Christopher S. Kilgore Texas State Bar No. 11398350 ckilgore@helmsgreene.com 1700 Pacific Ave., Suite 3740 Dallas, Texas 75201 Telephone: (214) 466-7910 Facsimile: (214) 466-7915

ATTORNEYS FOR PLAINTIFF CITY OF BONHAM

PLAINTIFF'S FIRST AMENDED PETITION FOR DECLARATORY JUDGMENT AND INJUNCTION PAGE 5 VIIIIIHX a • • THE STATE OF TEXAS COUNTY OF FANNIN

THXS LEASE AGREEMENT!

Made and entered into by and between the City . off. Bonham, Texas, hereinafter called the Lessor and Sidney B. Halet Jr. and t;r-I-e.jiy4,4a.tmi4a442r-y- ficeiRvi „via, ab°2. • 1 hereinafter palled the Lessee, WITMESSETH 1 .

The Lessor does hereby LEASE, GRANT pap LET unto the Lessee herein, the folloWng described premises located and situated at the City of Bonham. Municipal Airport; Metal. Quonset Hgt Hangar 2, The said Lease shall be for a period of five . years, effective from the date of this instrument. Likewise, the same sh1;11 be renewable at a negotiable lease rate, at the option of the City of Bonham! Texas, acting by and through its duly designated representatives. 3.. The consideration for,this Lease Agreement is .e72.0.0 monthly with the same being payable on the first business day of each month or cm the date of the execution of the lease, if the same is on an annual basis, -

g#9 ill payments are to . he paid to the City ecr tery.at the Bonham City Hall. •Failure to pay such rental, When the same shall become due and owing, shall render this Lease Agreement pull and,vOid at the option of the Lessor and wild . subject the Lessee to attorney fees and costs should they fail to surrender such premises to the said City. 4. The Lessee herein agrees, obligates andbindshinself to abide by the Rules and Regulations of the Bonham Municipal Air- part, a copy of which are attached hereto and made. a part of this lease by reference to the same_and for all purposes. • • • • . 5,

During the term of the lease Agreement the Lessee agrees

to the. following terms and conditions.: (a) The. Lessee will not alter, change qr remodel the premises or any Improvements thereon/ without first obtaining the prior consent, in writing, of the ,Bonham Airport Board. (b) The Lessee will not sublet, rent or mortgage any part or Portion of the above desoribed premises, to anyone with- outfirst obtaining the written con-Sent of. the. Bonham Airport

Board. (c) The Lessee Shall have the right and privilege to place such items of_ personal property on the premises, as he

desires, provided that, it is. in Compliance with the regulations established by the Bonham Airport Board. 6.

The lessee shall abide by- all FAA,. Rules and Regulations . . , iril the occupancy of the premises- and shall also,aBida by a11 . City Ordinances or Resolutioailfthe said .city. 7. Either party to this Lease Agreement shall,havp the right to terminate the same by giving 6. Months notice, writingiof . their desire to. terminate the lease/ and thwieffeetive date thereof.

CITY OF BONHAM, TEXAS EXHIBITB 4 • • city of BOIVI ► M SONHAM, TEXAS 75418

301 EAST FIFTH STREET • P .0. SOX 578 • TELEPHONE 583.3541

RULES FOR AIRPORT HANGER USE

1. The Airport Manager will maintain a list of all aircraft hangered and fees charged. Past due rentals over three months will lose hanger space. Rental fees may be paid in advance.

2. The Airport Manager will maintain a current list of all aircraft owners desiring aircraft space. This list will identify space required for this person's specific air- craft (some types of aircraft will only go into certain stalls).

3. Only operational aircraft will be allowed to utilize hanger space. A reasonable time period for repairing out of commission aircraft will be allowed not to exceed 90 days if there is a waiting list.

4. Hanger space is not transferable with sale of aircraft it there is a waiting list for space. If an aircraft owner with a hanger rented sells his aircraft with intent to purchase another of like size (will fit into same hanger space), he may maintain his hanger for 90 days to complete the sales transaction provided the rent is paid through this period.

The City of Donham Airport Board passed on the above rules for hanger use effective March 14, 1978.

we believe these few rules for hanger use at the Airport will help the Airport Manager to operate the hanger rentals and hanger priorities in a fair and equitable manner to everyone involved.

If you have any questions on the above, please contact the Airport Manager.

Sincerely, • • r. 'Charles Slitith

33 •

•

EXHIBITC •

City of 113ortbam Airport Rules and Regulations Resolution No. ni312.3 rusolut;on providing rules for the efficient and safe operation of the Jones Field Municipal Airport (hereinafter referred to as the "Airport"); and to provide the greatest service for the citizens of Bonham and the aviation public, is adopted by the City Council.

The definition of ''Airport'', "aircraft", "airplane", and other common terms used herein is as defined in Part 1, Code of Federal Regulations, Title 14, Aeronautics and Space. "Airport" with a capital refers to the specific airport for which these rules are adopted.

Section 1. Use of Airport Restricted

No person, partnership ; firm, association, corporation or entity, Incorporated or otherwise, shall use the Airport for any commercial activity, unless approved by the City Council or its duly authorized agent.

Section 2, General Rules and Regulations

The following rules and regulations shall be observed in the use arid operation of the Airport: Rule 2-1. Federal Air Traffic Rules of the Federal Aviation Administration (FM) for aircraft operated within the United States, and presently or hereafter effective, are hereby referred to, adopted, and made a part hereof as though fully set forth and incorporated herein In the event there is a conflict between this document and Federal Air Traffic Rules, then the latter shall apply. Rule 2-2. Safeguard of Persons and Property — The Director of Public Works shall at all limes have authority to take necessary and legal actions to safeguard any person, aircraft, equipment, or property at the Airport NOTAMS will be issued for actions affecting flight at the airport. Rule 2-3. Through-the-Fence Operations Prohibited — No private individual, partnership, FBC. company, or corporation shall be permitted direct ground access to the Airport by their aircraft, customers' aircraft, or private vehicle from property adjacent to or in the immediate vicinity of the Airport. Furthermore, no private individual, partnership, company, corporate, or customers' aircraft or vehicle shall be permitted direct, ground access to property from tine Airport — a practice commonly known as a "through-the-fence operation." Rule 2-4. Lien for Charges — To enforce the payment of any charge for repairs, improvements, storage, or care of any personal property by the City in connection with the operation of the Airport, the City may place 2 lien upon such personal property, which shall be enforceable as provided by law. Rule 2-5, Lien Possessory Right- To enforce the payment of any such charge, the Public Works Director/Airport Manager may retain possession of such personal property until all reasonable, customary, and usual compensation has been paid in full.

Page 1 of 1

021312.3

35 • • Rule 2-6. Unauthorized Signs and Equipment — No signs. non-aeronautical equipment, portable buildings, or trailers may be erected, moved-in, or installed on Airport property, except as may be specifically authorized by the Public Works Direct/Airport Manager, Rule 2-7. Surreptitious Activities — Any person observing suspicious, unauthorized or criminal activities snouid report such activities immediately to the Director of Public • Works, local police, officers of the Texas Department of Public Safety, and the Transportation Security Administration General Aviation Information Hotline at 1-866-GA SECUR(E) or 1-866-427-3287. Rule 2-8. Wrecked Aircraft — Every aircraft owner and hisiner pilot or agents, shall he responsible for notifying FAA, or NTSB if applicable: and promptly removing disabled or wrecked aircraft from the operational areas of the Airport. Director of Public Works shall also be notified and may provide additional guidance regarding removal of said aircraft, Rule 2.9, Repairs to Aircraft — All aircraft repairs shall be performed in accordance wi:h applicable FAA regulations. Repairs/maintenance shall be performed in hangars ',j7)k)ss operational circumstances make this impractical. Rule 2-13. Damage to Airport — Damage of any Kind by any person on Vie airport premises could result in criminal and/or financial liability to either the city and/or the vArier(s) of any personal property damaged. Rule 2 - 11. Injury to Person — Persons entering the Airport ground side property by euromo011e, other vehicular conveyance, or on foot (does not include persons in aircraft using approved airside facilities) do so at their own risk and with no liability incurring to the City for any injury or damage to person or property. Rule 2-12. Authorized Aircraft — Aircraft with current and correct FAA Certificates of Registration and Airworthiness. Use of the Airport by ultrelight aircraft (FAR 103) in the weight shift control and powered parachute class shall be subject to approval by the City Council and shall be in accordance with FM Order 5100.6 (latest change) and appropriate FART, Part 61 and 163 arid any other rules established by the City. Rule 2.13. Registration — All based aircraft shail provide registration Information annually by January 15 ° to the Public Works Director, Rule 2-14. Animals — All animals on airport premises are regulated by existing ordinances enacted by the City of Bonham. In general, all animals shall be leashed and under control of responsible party at all times. Rule 2-15, Living Quarters - No person may make permanent living quarters on Airport, unless specifically authorized by lease. Rule 2 - 16. Intoxicants and Narcotics Prohibited — These substances are considered illegal on the airport premises unless authorized by a medical professional. Rule 2 17. Foreign Objects Care should be taken not to .deposit foreign objects on -

airport premises. If observed, please remove or notify Public Works Director. Rule 2-15. Litter Do not litter or allow litter to accumulate on the surface:; of the airpor. Acceptable hangar conditions are addressed in hangar lease. Offenders may be subject to removal and/or cleanup costs.

Page 2 of 2

021312,3

310 • • Section 3. Ground Operations

Rule 3-1. - No unauthorized vehicles on taxiways or runways. The operator(s) of all authorized vehicles will be familiar with and follow all applicable rules and regulations of city/county/state and/or FM. All other vehicles will exercise caution while operating on applicable airport surfaces. Vehicles shall be vigilant when in proximity of buildings and provide adequate clearance for safe travel, Rule 3-2, - All vehicles shall yield right of way to aircraft in motion and emergency vehicles and not approach Rule 3.2. - Maximum recommended speed for ell vehicles is 15MPH unless otherwise posted.

Section 4. Airport Security

Rule 4-1. - The Transportation Security Administration publication 'Security Guidelines for General Aviation Airports", Information Publication A-001 dated May 2004, is available for reference at their website - vv‘vw.rsa.gov/. This document is used by the Airport as a guideline to security en the Ai:port and is incorporated as a working document.

Section 5. Aircraft Operation Rules

Rule 5-1. Aircraft Tie Downs A. Unoccupied aircraft, that are not hangared, shall be parked on the ramp and tied down. During inclement weather or in the event overnight parking Is required the wheels should be chocked and brakes set. In the event ramp tie downs are not available, the grass areas immediately North of the ramp may be used on a temporary basis, however this will he at the pilots risk.

B. All aircraft owners or their agents are responsible for the tie down or security of their aircraft at all times and particularly during inclement weather. C, Ramp parking is limited and any operator who requires their airplane to remain on the ramp over four days should notify the Director of Public Works. Nightly tie down fee. may apply, Rule 5-2. Running Aircraft Engines A. Pilots shall follow all procedures outlined in the AIM and applicable FARs related to starting of aircraft engines. El. No engine shall be started, run up, or warmed up until and unless the aircraft is in such position that the propeller stream or jet blast will clear all buildings, other aircraft, and groups of people. Rule 5 3. Damage to Airport lighttng - Report any airport lighting damage to Director -

of Public Works immediately. Damage to lighting could result in liability as defined in 'Rule 2-10, Rule 5-4. Taxiing Aircraft - All aircraft shall be taxied in a safe and responsible manner at a speed suitable to such operation. Departing aircraft yield to landing aircraft. Reckless operation will not be acceptable.

Pagc 3 of 3 021312.3

37 Rule.5-5. Parking Aircraft A. Unattended aircraft shall not be parked within fifty (50) feet of an aircraft fuel pump or fuel service truck parking area, B. Aircraft shall not be parked in such a manner as to hinder the normal movement of other aircraft and traffic unless specifically authorized by the Director of Public Works and only as a temporary measure. C. It is the responsibility of the pilot in command when leaving a parked aircraft unaqerided to see that the brakes are set and / or it is properly chocked and / or tied down Rule 5-6. Authority to Suspend Operations - The Director of Public Works may suspend or resliiot any or all operations whenever such action is deemed necessary in the Interest of safety. Appropriate NOTAMS will be issued by the Director of Public Works. Any suspensions and restrictions will be temporary in nature unless circumstances require otherwise, Rule 5-7. Emergency Locator Transmitter (ELT) - All pilots are urged to monitor and report any observed ELT activation. Role 5-8. Standard Traffic Pattern and Altitude, Non Towered Airports - All flight acb/ity will adhere to FM Advisor/ Circular g0-86 (latest change) Rule 5-9. Clearing Public Right of Ways- - Aircraft operators are expected to be familiar with and comply with regulations and recommendations contained within FAR 77. Rule 5-10. Takeoffs on Other Than Runways - All takeoffs and landings will be performed only on active runway unless authorized by NOTAM. Rule 5.11, Agricultural Sp raying Operations Ag operations shall be accomplished in accordance with the standards of the Texas Department of Agriculture in an area sc designated by the Director of Public Works, Ag operators are required to secure adequate insurance to cover liability and cleanup costs in the event of a chemical spill. Rule 5.12. Model Aircraft - Model aircraft not capable of carrying a person shall not be permitted to operate, take off or be launched from, fioWn over or land at the Airport. Model A/C operations for specific aeronautical events such as fly-ins or air shows may be approyed for specific times by the Director of Public Works. Section 6 . Fueling, Flammable Fluids. and Fire Safetx

Rule 6-1. Fueling Aircraft A. All aircraft shall be grounded with engine snot down prior to fueling. B. Fuel Storage in hangars Is governed by terms of hangar leases. C. Persons or businesses wishing to dispense fuel into their privately owned aircraft shall not be denied: however, all Commercial operators and Private use involving over 20 gallon of aviation fuel, must obtain a fuel permit Issued by the City D. All fueling facilities require prior approval of the City Council and pertinent conditions will be set on a case by case basis,

Page 4 of 4 021312.3

3J 7. as a) 0 E _c 0 CD 0 >, 0 0 Mem bers v oting Nay ;

0 CD _C Q) 0 co ,2 Z." 0 0 - CD 0 0 - 0 Mem bers vo ting Aye; C 0 0 0 yr CO tu CU - 0 LL a) o ,.,

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• • •

1. P. 0. Box 130246 A PRormsionm, CORPORATION Office: (281) 367-7732 The Woodlands, Texas 77393-0246 Facsimile: (281) 367-8003

Gary Linn Evans Direct: (832) 541-8037 E-mail: evans@texasaviationlaw.com

June 4, 2014

Mr. Bill Shipp Via CMRRR No. 7013 1090 0000 2669 1742 City Manager Via Email: bonhamcitymanager®cableone.net City of Bonham, Texas and Via Facsimile No. 903-583-5761 514 Chestnut Bonham, Texas 75418

Re: NOTICE, DEMAND, AND PROOF OF CLAIM: Sydney B. Hale and Stephen Hale, d/b/a H&M Aircraft Service; Hangar Collapse of December 8, 2013 at the City of Bonham Municipal Airport, Bonham Texas.

Dear Mr. Shipp:

The undersigned and this law firm represent Sydney and Stephen Hale, cUb/a H&M Aircraft Service (the "Hales") regarding the above-referenced matters. Please direct all future correspondence regarding this matter to the undersigned at the address, e-mail address, and/or facsimile number stated herein. Hereinafter, "you," "your," "City of Bonham," and/or the "City" shall refer to the City of Bonham, Texas.

As you are certainly aware, on or about December 8, 2013, the hangar in which the Hales were conducting their aircraft repair and maintenance business at the City of Bonham Municipal Airport collapsed, causing extensive damages to the hangar and the property contained therein (the "Incident"). The hangar was used to conduct the Hales' aircraft related business and store multiple aircraft. After several months of correspondence with you and with others, on your behalf, we have been unable to reach an acceptable agreement resolving the damages sustained by the Hales, in whole or in part.

While you have previously received actual notice of the Incident and the Hales' damages caused by the Incident, this correspondence shall serve as formal, written notice of the Hales' claims against the City of Bonham, including, but not limited to, any claims arising under the Texas Tort Claims Act. A preliminary listing of all of the items the Hales claim to be missing, lost, stolen, damaged, or otherwise responsible for the aggregate of the claimed economic losses has previously been provided, and is also attached hereto for your convenience.

41( a via dolga w. cum wow. texa

2, • • Mr. Bill Shipp City Manager City of Bonham, Texas June 4, 2014 Page 2

Prior to the Incident, the Hales informed the City of the observed and deteriorating condition of the hangar. The City, specifically Mr. Ronnie Ford, on behalf of the City, unequivocally instructed the Hales to immediately vacate the premises and to stay out of the hangar. There was a significant likelihood that had the center section of the structure been supplementally supported at that time, the hangar would not have collapsed. Indeed, it was not until several hours later, after the City's failure to act that the hangar collapsed. Such action represents and assumption of complete command and control over the premises. The City's failure to reasonably protect the hangar from further collapse caused the damages incurred by the Hales, at least in part.

Following the Incident, an examination of the debris revealed that the apex bolts that held the top seam of the roof together were extensively corroded, undersized, and apparently had not been inspected in decades, making the hangar unsafe for occupancy and/or use. This presented an unreasonably dangerous condition which posed an unreasonable risk of harm to the Hales. The City was aware of this condition, yet did nothing to make the premises safe. Further discovery will be required to more fully determine what other and further duties the City breached in connection with the Hangar, including any inspections that might be required under the City's statutes.

This correspondence additionally serves as a final attempt to reach an acceptable offer of resolution, including, but not limited to, full payment of the damages incurred by the Hales as a result of the City's actions and/or failure to act, as well as the availability of hangar space at the Bonham Airport as to the Hales for and in support of their aircraft maintenance business. The Hales have been conducting their maintenance business at the Airport for many decades. The availability of hangar space to continue their business is a key material aspect to any potential solution to the issues that have arisen as a result of the Incident. However, Airport personnel seem to take particular delight in frustrating and impeding the Hales' attempts at continuing their business, completely unnecessarily so in our view.

We anticipate your prompt cooperation with an attention to these matters. If we fail to receive a response from you within thirty (30) days of the receipt of this notice, we will proceed with all judicial measures available to recover compensation for all of the damages you have caused the Hales, all as allowed and set forth under the Texas Tort Claims Act.

Sincerely,

COATS & EVANS, P.C.

/s/ Gary L. Evans Gary L. Evans

Encl.

Invtv. !masa via tionla Tv. coin tuoxAs eprop e, r Ai m h INVENTORY LIST FOR I-1 8 M AIRCRAFT SERVICE Bonham, Texas 75418 at Jones Field Airport Loss from December 8, 2013 Building Collapse subtotals 527 . 510 50 $222.608.90 $418. 801.50

BRAND NAME MODEL* AGE OF ITEM QUANTITY ITEM DESCRIPTION , URC BASE PRICIESTIMATED VAIJAEPLACEMENT VALU Whelan Strobe Tester B-148-000 1 year 1 Whelan Strobe System Tester $128 50 Site Built 18 yews 1 Portable Office $20,000 00 $20,00060 $22,000.00 Champion CT -475 17 Years 1 Spark Plug Tester and Cleaner 31,000 00 $1.000.00 $1,700.00 Carnbell Hausleld TF000821H 18 years 1 Campbell Hausfeld Commercial Air Compressor .Attachments &Hose 33,600 00 $5,000.00 $3.600.00 ,Unknown Unknown 15 - 20 years All Tables and Cabinets $2,000.00 $3,000.00 lWiliams Unknown 8 Years 12 Combination Wrenches 181/8" - 2"-12 point 650 $84900.00 $1,112.00 Champion Numerous New 48 Champion Spark Plugs 31,332 00 $1,332.00 $1,332.00 mss , 106 173.781 40 Yeas 1 . Small Air Compressor 2 cyl. 2h.p. 20 ga1.7.0 scfm @SOPS! $600.00 $300.00 'TELEDYNE CONTINENTAL o-200 Series 40 Years 1 Cessna 150-0-200 Series Engine w/All Accessories TCM $10,000.00 $25,000.00 PON PA -24 -250 54 Years 1 Piper PA-24 -250 Commanche Low line $50000.00 $60,000.00 1501_ 41 Years 1 Cessne 150 N10732 IF R Cert. , New Minenum Ed. Engine, Avionics Upgrade $30000.00, $36. 000.00 'Wag Aero Name New 2 Marco 10 $1,178.00 R8D,Kamas,Kleen-Ez E330 18 Years 1 Cleaning VAT and Solution 1559.90 $900.00 Buffalo 18 Years 1 Large Hydraulic Press 12 Ton And Accessories $eoo.00 $1,000.00 Various Brands 3 - 20 years 8 Jack $3,500,00, ;3,500.00 Cessna 0-200 Series Used 2 amine Mounts FOf 0-200 Engines $2.006.00 $3,200.00 Various Multiple 1 - 39 years Multiple !Regular Tools $5,000.00 $5,000.00 Various Multiple New To 5 Year Maki* !Tool Cabinet Chest and Tools By Office $1,500.00- $3,000.00 Unknown N/A 2 Years 1 ; 4 °UMW Tool Cart - Blue $800.00 $800.00 Various, Dell Multiple 10 - 16 Years 2 computers and Equipment $4,009.09. $6,66000 Aerostell Multiple New 10 Now Cases of Av. 011 Aeroshell $700.00 $960.00 Icpn Vertex A24, VXA220 5 Years 2 Portable Aircraft Radios $850.00 ' $850.00 AY Comm, David Clark AC-900, H10-66 4-10 years 5 Aircraft Head Sets $1,500.00 $1,718.57 ;Premier Motets Inc. Multiple . .25 Years _Multiple Aircraft Rolls And Sheets Of Aluminum. Sheet Metal $500.00; $2,500.00 1.10,110 DOW 16 Years 20 3 - Shelf 47" W x 36.4 " H x 27.6" D. Shelving s3500.00' $19,00000 Various New 6 Boxes Champion Spirit Plugs . Various irk $27.70 Per Plug a .apo.00 I , $1,994.40 ! 1=1/99.nlinfi 0-360 .5 Years 2 Aircraft Cylinders 'Garman 4 Years 1 Gamin GPS, Accessories,Mount, Full Manual, Software Update $3,500.00! $3,509.00 Siff.*,_Bendix Various 8 Years 2 Bets, Magnetoes & Ignition Harnesses $2,800.00 80 1. Delco .Multiple 5-20 Years 2 Starters - Delco $400.00 $905 !Mum* .0_ 7.20 Years 2 Generators Weg_Aerg,chief, Aircraft Spruce nee«ied !All AN AN Bolts and Screws $eocosp. !AlVsk._A•roShief, Aircraft Spruce, Avian Assorted All All Fasteners $809.430 :. $3,000.00 MagAero,Shief, Aircraft Spruce . Aviall Assorted All All Rivets $150000;_, $2,500.00 15X AO Years 1 : Strut Pump-Pneumatic $1,000.00; $500.00 All Rewired Assorted All Up To Date Al 'Aircraft Manuals & All Current Revisions E. Sutegrtgions $10,000.00; $25,000.00 7AC Years 2 . Magneto Switches $1,000.00 $1,50003 $1,500.00 260 ;20 Years 1 Simpson 260 VOM And Case And Lead Attadanents $350.00- MS.PAL199/1. _ MSC*04240941 25 Years 1 ,Etcher And AI Attectabents t490:09!, . _$554,331 Unknown 20 Years 1 :Commercial Wet Dry VOCUUM $200.00. $648.00 ' 1-9.calHatciamfo : AlPre 5 years 1 ...iGelvanaed Parts Wash Container $100.00', $100.00. ;Nrcre. 6,6fIM6 20 Gal.,LH/RH 8 Years Wur.nirNm _.F4e1TanIC.1-1*FtH $25.0 •00 : $1100,7.4 INB;r1fIPnice Various 4 Years AN •Gesket Material 120049 . . ;40410 Rglige_Electric Co.Stay Warn, 25 Years 1 Electric Injector cleaner Pot 110 Volts $15000 $300.00 _ : gEo, 4 Drawer 28 Years 5 Fib Cabinets 4 Drawer Commercial Vertical Files $750.00 $1,149.95 ' Multiple All All .Assorted.t1sed Aircraft Parts $2,500.00! $5,000.00 ! The Tank Depot , 22 Years 1 Portable Fuel Tank With Pump Hose, And No )e $650.00 _ $60190 Chicago Pneumatic CP872 25 Years 3 Die Gnrider P0 0,99. . $250.00 Sears 35 Years 1 Bench Grinder and Stand W/ Wire Brush $100.00; $250.00 Sears Dremel 4000 3 Years 1 Dremel 4000 - 6/50 w/ Rotary Tool Kit $100.00' $170.00 Sears Des ilbiss 30 years 2 : Aircraft Spray Guns and Equipment $000,90 $823.28 Lowes 300 -Ft Cart Hose Re 5 Years 5 Water Hose Can $150.00 $208.33 Aircraft Spruce Various 1- 10 Years All Jumper Cable Sets And Adaptor Power Plugs $300.00. $983.50 Local Business N/A 12 Years 1 16'x4' Professional Business Sign $600.00 $800.00 Watson Electric Venous 1 - 15 Years All Space Heaters - Office $60.00! $300.00 Superior MOO* 1 - 10 Years All AN Mac. Gasket 0/H Continental 8 Lycoming Engine Sets $3000.00 $3,000.00 Walton 22 Years 1 Bench and Vise $150.00 $300.00 Burroughs N/A 22 Years All Specialty Aircraft Cylinder Wrenches $2,000.00 62.690.0 3. Local Business WA 15 Years All Furniture - Desks, Couch, Curtains, Fumishngs $2,500.00 $2,500.00 Chef. Wag Aero,Aircrall Spruce 1 - 30 Years All Multiple Different Solenoid Contactors . . $1.500.00 $3,000.00 Aviall Multiple 1 - 6 Years Ful Rack Aircraft Tires and Tubes $500.00 $1,800.00 Multiple Multiple 1 - 30 Years Multiple Electrical Equipment, AviationWirerdPmectors ._ $500.00 $1,500.00 Brown Tool Co.Yard Store 1- 30 Years Multiple Pneumatic Tools $500.00 $5,000.00 Grainger, Other mum* 1- 10 Years Multiple Butane, Kerosene Heaters, Smudge Pots - Shop $2,500.00 $1,500.00 Grainger 8500 CFM 15 years 2 Champion Water Coolers- Shop $300.00 $3.868.00 Watson Electric Lights 13 Years 2 Fixed Lights 230 Volt $200.00 Local Various 15 - 20 Years All Electrical Service - Disconnect - Shop Panel - Office Panel and Wiring 54.00000 $4.000.00 Wag Aero 10/10 Scale 22 Years 1 Inclinometer $75.00 595.00 McCraw Oil Co. Solvent New 5 5 Gat Cans Of Solvent 5100.00 $200.00 Wag Aero Multiple 3 - 20 Years 5 Floor Creepers & Landing Gear Axle Stand & mechanics Roller Seat $150.00 $479.98 Toolbarn corn Multiple 11 Years Multiple Greenlee Knockout Set 8 Fishtape & Sell Test Non-Contact Voltage Detector $150.00 $1,234.94 Wag Aero Multiple 1-30 Years Multiple Spark Plug Tools & 0:11Fiter Cutter & Oil Filter Torque Wrench $750.00 $1 006.90 Wag Aero Rapco New 3 Aircraft Vacuum Pumps $500.00 $950.00 Various Vanous 10 Years Multiple Welding Rods & Supplies $2,000.00 $2.000.00 Wag Aero SCAT New Multiple Scat Hose $200.00 $377.50 Antique Antique Antique 2 Refrigerator and Antique Coke Box $500.00 $600.00 Best Buy 3 Years 1 Microwave $100.00 $300.00 Sears 8 Years 1 Office A/C Unit $300.00 $500.00 Palomar, Sears Various 36 Years 8 CB Base Stations and Linear AMP and Microphone and . Equipment $1,000.00 $4,000.00 Milwaukee 2101-22 7 Years 3 Cordless Milwalkee Screw Guns, Chargers, Cases $300.00 $387.00 Local Vender Various 1 - 40 Years All Aircraft Electric Wee and Assorted Connectors $400.00 $1,500.00 Fluke 87V 3 - 9 Years 2 Fkike Voms &Leeds 8 Attachments $750.00 $1,000.00 MSC Industrial Supply Co. 190-502 3 Years 1 190-502 500 MHz Fluke Scope Meter Test Tool $1,500.00 $5,199.95 Local Electric Multiple 1-12 Years Multiple Solder and Soldering Irons and Accessories $250.00 $1,250.00 Zoro Tools , Buy Heat ShrinkCorn hg-501-a & Adj. Tem; 19 Years 2 Heat Guts . $100.00 $123.81 Various Multiple 1 - 40 Years Multiple Drill Motors - Bits & Taps $500.00 $2,200.00 Various Multiple 1 - 45 Years Multiple Machines! Tooling & Measuring Devices $600.00 $5,811.47 Various Multiple 1 -10 Years Multiple Multiple Ladders & Scaffolding $200.00 $1,079.46 Dawes,westem Flyer. Sears 35 Years + Multiple Several Bicycles $200.00 $1,500.00 General Shelters Port A Cool 1 Year 1 Portable Water and Air Conditioner $6.60 .00 $1,595.00 Various Multiple 1 - 13 Years Multiple Lubricants, Greases, Grease Guns, Paints and Glass Cleaners 8. Polishes $400.00 $2,000.00 Wag Aero J-100, .1-105 3 - 7 Years 4 Aircraft Jacks, Aircraft Jacks- Piper & Beech $800.00 $1,216.50 . Multiple Multiple 1 - 6 Years 5 Battery Chargers $200.00 $1,767.45 Aircraft Spruce Multiple New. . Multiple Complete Intake Assemblies & Elements & Champion Oil Filters $688.25 oragger.Com NOG-6 12 & 15 Years 2 Gas Tow Motors $1,800.00 $3,190.00 Northern Tool P-3060-2 5 RoN Around Work Tables $300.00 $1,699.95 The Jack House Inc. 10 Years 2 Tall Wing jacks $2,000.00 $2,000.00 Aviall New 12 Lord Cowl Mounts 2 $15.91 Ea. $150.00 $190.52 Yard Store.Com 270A 6 Years 2 Rivet Gun & Regulator $384.95 $384.95 Yard Store.Com PIN 120 6 Years 1 Rivet Set Mix Straight $29.95 $29.95 Yard Store.Com P/N121 6 Years 1 Rivet Set Mix Angled $29.95 $29.95 Yard Store.Com P/N 181 6 Years 1 Rivet Set Swivel Flush $18.95' $18.95 Yard Store.Com 2470 6 Years 1 Beck Rivet Set $21.95 $21.95 Yard Store.Com 5011 - 2K 6 years 1 Rivet Squeezer $195.95 6 16.66 Yard Store.Com SKT17 6years 1 Rivet Squeezer Set $119.95 $119.95 Yard Store.Com , P/N 1410 7 Years 1 Air DriN (2600 RPM) $289.95 $289.95 Yard Store.Com P/N1412 7 Years 1 Air Drill (9600niiid) $319.95 $319.95 Yard Store.Com P/N 1AM1541 7 Yeas 1 Air Orel 45 Degree $553.95 $553.95 Yard Stcre.Com P/N 1AM1551 7 Years 1 Air Drill 90 Degree $571.95 $571.95 Yard Store.Com P/N 4135/4136 7 Years 1 Sheet Metal Winker, Stretcher Set $382.95 6362.95 Yard Store.Com P/N24606 9 Years 1 Tap & Die Set $139.95 $139.95 Yard Store.Com AT540A 10 Years 1 Screw Removal Tool $30.95 $30. 96 Yard Stcre.Con 04522 10 Years 1 nameless Heat Gun $89.95 689.95 Yard Store.Com PIN 131 6 Years 4 Cleco Pliers $23.80 $23.80 Yard Store.Com P/N24EL 13 Years 50 C locos .$2.25 ea. $112.50 $112.50 Yard Store.Com 25CL-1/8 6 Years 1 Clecos 25 pa's . $11.95 $11.95 Yard Store.Com 25CL -3116 6 Years 1 Clecos 25 pa's . $11.95 $11.95 Yard Store.Corn 25C1-3/32 6 Toffs 1 Clecos 25 pc.'s $11.95 $11.95 Yard Store.Com HNX -1/8 6 Years 50 Pecos HNX 1/8 $197.50 $197.50 Yard Store.Corn HNX -3/32 6 Years 50 Clecos HNX 3/32 $197.50 $197.50 Yard Store.Com KWN -1/8 6 Years 50 Clecos KWN 1/8 $147.50 $147.50 Yard Store.Com KWN -3/32 6 Years 50 Clecos KWN 3/32 $147 . 50 $147.50 Continental LRJ3 18 years 1 4400 LB. Capacity Shop Hoist 4000 $3,000.00 $3,727.00 Cessna 172 5 Years 1 Rt. Side Elevator $2,000.00 $2.000.00 Champion M41N New 25 Antique Spark Plugs 5 Boxes $1,250.00 Continental Red Seal SA-190 New 25 Antique Spark Plugs 5 Boxes $1,250.00 Eismann Antique Antique 1 Set Ignition Leads $500.00 Northern Tool 3103K 30 Years 2 Surface Prep Grinder Kit $250.00 Northam Tool 301B 30 veers 1 Angle Die Grinder 1/4 " $100.00 Northem Tool WBA-1-3672W 15 Years 5 Workbench. Wood Top 721N x36"D. $2,500.00 Northern Tool WW-4284 15 Yeas 3 Welded Steel Workbench 84". X 42" $2,099.97 Portable Partitions Panels 21 Yeas 25 Hush Panel Configurable Cubicle Partition $3,975.00 Wal-Mart Pump Up Sprayer 1 Year 2 Pump Up Sprayer $34.00 Horne Depot locr Water Hose 5 Years 3 Industrial Pro 5/8" x,100' Water Hose $149.94 Sears Arne° 6 Years 4 Amflow Blow Gun Siphon Sprayer 5125.76 00 00OZS slees 1 01!d -0 3 7 l0l!d Z Posrl 04Z-VZ -Vd wrids tiett. 190d1./ . 00 OS LS slewt.uo.10 910H azIS Ds9e1 Jelnbeit '2 sleuuttaiD leuued tuewrwsw eidionvi maN D6 ' 68 LS Ped *Mr 608 Z sieeA z sie slee,kw iwbol .weV6em DOOMS l% P0119A!8 990JB S sieo,t 91. - L 188 Vil clocle8 46 .ZZS touaim dtUnd LunrceA 1 smei, 9 9 1, LVLI oodeH S6 OBS 1001 buLleld L siee,1/4 lI 8AZ L Z SIV oev tem SZ1,00$ O01S Red lees dolS - I- WS P MO N LL8 0 L1V 00.0139$ sleccldlunoY r eU1bUR P101 eld41 1 1 MON echr ei w695aM oeV6em 00.9E IS 000H /M 191001 JaPuJA3 lelueJeMO t sleeA LZ ald!WINI 0u0V-Eem 00VSZS 5 1001 eimuu.owubBri aiduinifi sm.A zz - I. sPwiv cuiv 61M 00til4 JGIBOH et/ISU3 leeH -z3 El peen *Ai tui 'prel-rz tiottejt . lecild - JozekedeS !O -.I.Vionuiv 1, meN 5,181000 HO timslif5 way z - aillinVI oav otick49 3 175: ola;: vVt.: scrur^diiind. lxiint:Mrtioluji)g ifeckual eldOtrIPI Pesii V Merti Old01 ,1 11 Waft eaiiind lend 0143913 taped eicEinitl Pas() V meN' atditina sovssel Obtiorftt Pe4A*IOV ite-hrl!Veid11411V1 eld!IIM . 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CV-14-41722

CITY OF BONHAM § IN THE DISTRICT COURT OF § Plaintiff, § § v. § FANNIN COUNTY, TEXAS § SIDNEY B. HALE, JR. § § Defendant. § 336TH JUDICIAL DISTRICT

DEFENDANT SIDNEY B. HALE, JR.’S VERIFIED ORIGINAL ANSWER

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW, Defendant Sidney B. Hale, Jr. (“Mr. Hale” and/or “Defendant”) and files

this his Verified Original Answer against Plaintiff, City of Bonham, Texas (the “City” and/or

“Plaintiff”), and in support thereof, would respectfully show this Court the following:

I. GENERAL DENIAL

Defendant appears and generally denies each and every, all and singularly, the material

allegations contained in Plaintiff’s Original Petition, and any amendments or supplements

thereto, in accordance with Rule 92 of the Texas Rules of Civil Procedure, demands strict proof

thereof and says that this is a matter for jury trial.

II. VERIFIED DENIALS

1. Defendant denies that conditions precedent have been performed or have occurred.

2. Defendant denies the existence of a valid and enforceable lease agreement between

the parties. The originally executed lease agreement has long expired and the parties

have not entered into a renewal of said lease.

3. Defendant denies that Plaintiff gave notice and proof of Plaintiff’s claims.

1 III. AFFIRMATIVE DEFENSES

1. No causation. Defendant is informed and believes, and based thereon alleges that

any injury, damage, loss, or detriment suffered by Plaintiff was directly and proximately caused

by persons separate and apart from Defendant whether named or unnamed in this action.

2. Negligence of Others. Defendant is informed and believes, and based thereon

alleges that any injury, damage, loss or detriment suffered by Plaintiff was directly and

proximately caused, in whole or in part, by the negligence of persons separate and apart from

Defendant whether named or unnamed in this action.

3. Plaintiff’s Negligence. Defendant is informed and believes, and based thereon

alleges that any injury, damage, loss, or detriment suffered by Plaintiff was directly and

proximately caused, in whole or in part, by the negligence of Plaintiff.

4. Comparative Responsibility. Defendant is informed and believes, and based

thereon alleges that in the event that a finding is made that Defendant was negligent and that said

negligence proximately contributed to Plaintiff’s damages, which is expressly and specifically

denied, and/or that Defendant is otherwise legally responsible for Plaintiff’s damages, Plaintiff’s

amount of recovery from Defendant should be reduced on the basis of Plaintiff’s own negligence

and/or the negligence of third parties which contributed to the damages for which Plaintiff is

seeking recovery in accordance with the doctrine of comparative responsibility and the Texas

Civil Practice & Remedies Code.

5. Assumption of Risk. Defendant is informed and believes, and based thereon

alleges that at and before the time and place of the accident which is the basis for the present suit,

Plaintiff fully knew of and appreciated any risk of danger of injury, loss, damage or detriment

regarding the events and matters alleged in the Original Petition, and having full knowledge and

2 appreciation of such risk and dangers, voluntarily exposed itself to and assumed all risk and

dangers of injury, loss, damage or detriment from the events and matters alleged in the Original

Petition.

6. Mitigation of Damages. Defendant is informed and believes, and based thereon

alleges that at and before the time and place of the accident which is the basis for the present suit,

Plaintiff fully knew of and appreciated any risk of danger of injury, loss, damage or detriment

regarding the events and matters alleged in the Original Petition, and having full knowledge and

appreciation of such risk and dangers, failed to take any action to mitigate any damages incurred

and voluntarily exposed itself to injury, loss, damage or detriment from the events and matters

alleged in the Original Petition.

7. Right to Amend. Defendant intends to rely upon such other defenses as may

become legally available hereafter or become apparent during discovery proceedings in this case

and hereby reserves its right to amend its answer to assert any such defenses.

IV. SPECIAL EXCEPTIONS

Defendant specially excepts to Plaintiff’s original petition because the Declaratory

Judgment Act does not expand the trial court’s jurisdiction to include determinations of liability.

See Tex. Nat. Res. Conserv. Comm’n v. IT-Davy, 74 S.W.3d 849, 859-60 (Tex. 2002). Just as a

declaratory judgment cannot be used against a government or governmental official to establish

the validity of a contract, enforce the performance of a contract, or ignore contractual liability,

see id. [emphasis added], a declaratory judgment cannot be used by a governmental entity for the

same purpose.

3 V. ATTORNEYS’ FEES

The preceding is incorporated by reference as if fully copied and set forth at length. As a

result of the events giving rise to this complaint, Defendant has been required to retain the

services of counsel to prosecute this action. Defendant additionally sues for reasonable attorneys’

fees and legal expenses for the prosecution of this action to judgment and for any appeal

therefrom.

VI. AMEND PLEADINGS

Defendant reserves the right to amend these pleadings.

VII. JURY DEMAND

Defendant hereby make demand for jury trial, as is his right under the Constitution and

laws of the State of Texas, in accordance with Tex. R. Civ. P. 216 (a), and tenders the required

jury fee concurrently herewith.

VIII. REQUEST FOR DISCLOSURE

Under Texas Rule of Civil Procedure Rule 194 et. seq., Defendant requests that plaintiff

disclose, within thirty (30) days after service of this instrument, the information or material

described in Rule 194.2.

IX. PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendant respectfully prays:

1. That Plaintiff take nothing by way of this cause of action and that this cause of

action be dismissed;

2. That Defendant be awarded all costs and expenses incurred herein; and

3. That Defendant be granted such other and further relief, both at law and in equity,

to which Robinson may show itself justly entitled.

4 Respectfully submitted,

COATS & EVANS, P.C.

/s/ Gary L. Evans Gary Linn Evans Texas Bar No. 00795338 Email: evans@texasaviationlaw.com George Andrew Coats Texas Bar No. 00783846 Email: coats@texasaviationlaw.com P.O. Box 130246 The Woodlands, TX 77393-0246 Telephone: 281-367-7732 Facsimile: 281-367-8003

ATTORNEYS FOR DEFENDANT SIDNEY B. HALE, JR.

CERTIFICATE OF SERVICE

I certify that pursuant to Rule 21a of the Texas Rules of Civil Procedure a true and correct copy of the foregoing instrument has been delivered to all counsel of record on the 7TH day of July, 2014.

s/ Gary L. Evans Gary L. Evans

Mr. John Reenan Via Electronic Filing and/or jreenan@helmesgreene.com Facsimile No. 214-466-7915 Mr. Christopher S. Kilgore ckilgore@helmesgreene.com HELMES & GREENE, LLC 1700 Pacific Ave., Suite 3740 Dallas, Texas 75201 Telephone: 214-466-7910 Facsimile: 214-466-7915

5 A9 CAUSE NO. CV-14-41722

CITY OF BONHAM § IN THE DISTRICT COURT OF § Plaintiff, § § v. § FANNIN COUNTY, TEXAS § SIDNEY B. HALE, JR. § § Defendant. § 336TH JUDICIAL DISTRICT

DEFENDANT SIDNEY B. HALE, JR.’S ORIGINAL COUNTERCLAIM

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW, Defendant Sidney B. Hale, Jr. (“Mr. Hale” and/or “Defendant” and/or

“Counterplaintiff”) and files this his Original Counterclaim against the City of Bonham, Texas

(the “City” and/or “Plaintiff” and/or “Counterdefendant”), and in support thereof, would

respectfully show this Court the following:

I. LEVEL TWO CASE

Mr. Hale requests that this case be designated as a Level Two case for discovery purposes

pursuant to Tex. R. Civ. P. 190 et. seq.

II. PARTIES

Defendant/Counterplaintiff is an individual residing in Fannin County, Texas.

Plaintiff/Counterdefendant is located in Fannin County, Texas and is duly organized and

acting under the laws of the State of Texas. Service of this document may be had in accordance

with Rule 21a, Texas Rules of Civil Procedure, by serving Counterdefendant’s attorney of

record, Mr. John Reenan, Helmes & Greene, LLC, 1700 Pacific Ave., Suite 3740, Dallas, Texas

75201.

1 III. JURISDICTION

This Court has jurisdiction over this matter pursuant to Sections 101.001 et. seq. of the

Texas Civil Practice and Remedies Code because the Texas Legislature waived

Counterdefendant’s sovereign immunity for claims involving negligence and premises defects.

The City is a governmental unit and owner of the premises. The condition of the roof of

the Hanger constitutes a premises defect. More specifically, the apex bolts that held the top seam

of the roof together were extensively corroded, undersized, and apparently had not been

inspected in decades, making the hangar unsafe for occupancy and/or use and posed an

unreasonable risk of harm. The City knew or should have known of the danger.

The City owed Mr. Hale the duty owed to an invitee under Texas law. The City breached

the duty owed to Mr. Hale by not adequately warning Mr. Hale of the condition and not making

the condition reasonably safe. The City’s breach proximately caused Mr. Hale’s injuries. If it

were a private person, the City, would be liable under Texas law.

No exception to the wavier of immunity bars the claim because no exception applies or

an exception to an exception reinstates the wavier. Notice was provided as required by the Texas

Tort Claims Act.

IV. VENUE

Venue is appropriate in Fannin County, Texas because the property which is the subject

of the present suit is located in Fannin County, Texas and all, or substantially all, of the events

giving rise to this litigation occurred in Fannin County, Texas.

V. NOTICE

Plaintiff/Counterdefendant was provided with notice of the claim in accordance with Tex.

Civ. Prac. & Rem. Code §101.101, and/or received actual notice of the claim prior to this

2 litigation.

VI. BACKGROUND FACTS

Plaintiff/Counterdefendant is the owner of a hangar on the grounds of the City of

Bonham Airport (the “Hangar”). On or about June 18, 1984, Mr. Hale entered into a lease

agreement with the City for the Hangar (the “Lease”). The Lease, by its own terms, expired after

five years.

On or about December 8, 2013, the Hangar roof collapsed, causing extensive damages to

the hangar and the property contained therein (the “Incident”). The Hangar was used to conduct

Mr. Hale’s aircraft repair and maintenance business and to store multiple aircraft.

Prior to the Incident, Mr. Hale informed the City of the observed and deteriorating

condition of the hangar. The City, specifically Mr. Ronnie Ford, on behalf of the City,

unequivocally instructed Mr. Hale to immediately vacate the premises and to stay out of the

Hangar. There was a significant likelihood that had the center section of the structure been

supplementally supported at that time, the Hangar would not have collapsed. Indeed, it was not

until several hours later, after the City’s failure to act that the Hangar collapsed. Such action

represents and assumption of complete command and control over the premises. The City’s

failure to reasonably protect the Hangar from further collapse caused the damages incurred by

Mr. Hale, at least in part.

Additionally, the City barred Mr. Hale from the property, which was saturated with ice

and water, for many weeks, during which all sorts of damage was done to his personal property,

including sensitive aviation tools, parts, gauges, servicing equipment, inventory, and tooling.

Following the Incident, an examination of the debris revealed that the apex bolts that held

the top seam of the roof together were extensively corroded, undersized, and apparently had not

3 been inspected in decades, making the hangar unsafe for occupancy and/or use. This presented

an unreasonably dangerous condition which posed an unreasonable risk of harm to Mr. Hale. The

City was aware of this condition, yet did nothing to make the premises safe. Further discovery

will be required to more fully determine what other and further duties the City breached in

connection with the Hangar, including any inspections that might be required under the City’s

statutes.

VII. CAUSES OF ACTION

Defendants’ acts and omissions have given rise to the following:

Negligence

Mr. Hale will show that the foregoing constitutes negligence as that term is used and

understood by the Courts of this State. The preceding is incorporated by reference the same as if

fully copied and set forth at length.

As owner of the Hangar, the City owed a duty of reasonable care to Mr. Hale. The City

had a duty to maintain the premises in a reasonably safe and habitable condition. The City

breached its duties to Mr. Hale. As a result of the City’s breach, Mr. Hale incurred damages.

Premises Defect

The preceding is incorporated by reference as if fully copied and set forth at length. In

addition to, and without prejudice to any other cause of action described herein, the foregoing

constitutes a premises defect as that term is used and understood by the Courts of this State.

The City is a governmental unit and owner of the premises. The condition of the roof of

the Hanger constitutes a premises defect. More specifically, the apex bolts that held the top seam

of the roof together were extensively corroded, undersized, and apparently had not been

4 inspected in decades, making the hangar unsafe for occupancy and/or use and posed an

unreasonable risk of harm. The City knew or should have known of the danger.

The City owed Mr. Hale the duty owed to an invitee under Texas law. The City breached

the duty owed to Mr. Hale by not adequately warning Mr. Hale of the condition and not making

the condition reasonably safe. The City’s breach proximately caused Mr. Hale’s injuries. If it

were a private person, the City, would be liable under Texas law.

No exception to the wavier of immunity bars the claim because no exception applies or

an exception to an exception reinstates the wavier. Notice was provided as required by the Texas

Tort Claims Act.

Breach of Contract/Promissory Estoppel

The preceding is incorporated by reference as if fully copied and set forth at length. In

addition to, and without prejudice to any other cause of action described herein, to the extent the

Court determines there is a valid and enforceable contract between the parties, the foregoing

constitutes breach of contract and promissory estoppel as those terms are used and understood by

the Courts of this State. In pertinent part, the City claims a lease agreement between the parties

for lease of the Hangar.

The City breached the contract(s) described in the preceding paragraph when the City

defaulted under the terms of the Agreement and refused to keep the Hangar in a safe condition.

Mr. Hale substantially relied upon the promises made by the City to their detriment, which

reliance was foreseeable by the City, which represents an action under the theory of promissory

estoppel as well. Upon information and belief, the City had no intention of performing under the

terms of the agreement at the time the City entered into the contract with Mr. Hale.

Consequently, the City should be held liable for its breach of the contract(s).

5 As a result of the City’s breach of contract/promissory estoppel, Mr. Hale has suffered

damages within the jurisdictional limits of this Court. Additionally, pursuant to Tex. Civ. Prac. &

Rem. Code §38.001 et. seq., Mr. Hale requests that this Court, upon trial of this matter, award it

the reasonable and necessary attorneys’ fees, legal expenses, and costs of court incurred in

seeking the recovery for the City’s breach of contract.

Damages Based Upon Unjust Enrichment

In addition to, and without prejudice to the foregoing, Mr. Hale seeks recovery of its

damages pursuant to the theory of unjust enrichment. The preceding is incorporated by reference

as if fully copied and set forth at length.

The City agreed to provide a reasonably safe and habitable hangar space to Mr. Hale in

exchange for monthly lease payments.

Although the City refused to maintain the premises in a safe and habitable condition, the

City continued to avail itself of all of the services, benefits and privileges provided by Mr. Hale.

The City has been, and continues to be, unjustly enriched unless the Court requires it to pay for

such use and benefits.

Mr. Hale hereby seeks recovery of the reasonable value of the services, benefits and

privileges by which the City has been unjustly enriched at least in an amount equal to the

damages incurred by Mr. Hale. Mr. Hale additionally seeks recovery of all of its attorneys' fees

and legal expenses incurred to recover the value of such services, benefits and privileges by

which the City has been unjustly enriched, pursuant to the provisions of Texas Civil Practice and

Remedies Code §38.001, et seq.

The events leading up to and amounting to such unjust enrichment are proximately

responsible for the damages sustained by Mr. Hale in this matter.

6 Violations of the Texas Deceptive Trade Practices Act

The preceding is incorporated by reference as if fully copied and set forth at length. In

addition to, and without prejudice to any other cause of action described herein, the foregoing

constitutes violation of the Texas Deceptive Trade Practices Act (the “DTPA”).

The City violated the DTPA when it engaged in false, misleading, or deceptive acts or

practices that Mr. Hale relied on to his detriment. Specifically, the City failed to keep the Hanger

in which Mr. Hale operated his business reasonably safe and habitability. The condition of the

Hangar posed an unreasonable risk of harm to its occupants, making the hangar unsafe for

occupancy and/or use. The City further breached an express and/or implied warranty that the

premises would be reasonably safe and fit for occupancy.

The City further violated the DTPA when it engaged in an unconscionable action or

course of action that, to Mr. Hale’s detriment, took advantage of Mr. Hale’s lack of knowledge,

ability, expertise, or capacity to a grossly unfair degree. Specifically, the City failed to maintain

the premises in a reasonably safe condition. The condition of the Hangar posed an unreasonable

risk of harm to its occupants, making the hangar unsafe for occupancy and/or use.

The City’s wrongful conduct was a producing cause of Mr. Hale’s damages.

Mr. Hale would also show that the City acted “intentionally” and “knowingly” as those

terms are defined in the DTPA. Mr. Hale would show that the City committed unconscionable

actions “intentionally” and “knowingly.” Mr. Hale seeks recovery of actual damages, economic

damages, statutory damages, mental anguish, treble damages, and attorneys’ fees for the City’s

violations of the DTPA.

As a direct and proximate result of these actions, the City has violated the provisions of

the Texas Deceptive Trade Practices Act and Mr. Hale has been damaged in the manner and

7 amount as described above.

Gross Negligence

The preceding is incorporated by reference as if fully copied and set forth at length. In

addition to, and without prejudice to any other cause of action described herein, the foregoing

constitutes gross negligence as that term is used and understood by the Courts of this State. The

preceding is incorporated by reference the same as if fully copied and set forth at length.

As owner of the Hangar, the City owed a duty of reasonable care to Mr. Hale. The City

had a duty to maintain the premises in a reasonably safe and habitable condition. The City

breached its duties to Mr. Hale. As a result of the City’s breach, Mr. Hale incurred damages.

The City failed to keep the Hanger in which Mr. Hale operated his business reasonably

safe and habitability. The condition of the Hangar posed an unreasonable risk of harm to its

occupants, making the hangar unsafe for occupancy and/or use. The City’s negligence posed an

extreme degree of risk and potential harm to others resulting in the likelihood of serious injury to

any occupants of the Hangar. The City acted with conscious indifference to the rights, safety or

welfare of others.

The wrongful conduct and gross negligence of the City proximately caused the damages

incurred by Mr. Hale.

Bailment

The preceding is incorporated by reference as if fully copied and set forth at length. In

addition to, and without prejudice to any other cause of action described herein, the foregoing

constitutes bailment as that term is used and understood by the Courts of this State. The

preceding is incorporated by reference the same as if fully copied and set forth at length.

Upon notice of the deteriorating condition of the hangar, the City instructed Mr. Hale to

8 immediately vacate the premises and to stay out of the Hangar. Such action represents and

assumption of complete command and control over the premises, as well as delivery and

acceptance of the personal property within the hangar. Mr. Hale vacated the premises as

demanded by the City with the understanding that the structure would be repaired and then

returned to the control of t Mr. Hale, with all of its contents intact.

The City exercised control and dominion over the Hanger and its contents, yet failed to

return the property, in an undamaged condition, to Mr. Hale. Indeed, the City barred Mr. Hale

from the property, which was saturated with ice and water, for many weeks, during which all

sorts of damage was done to their personal property, including sensitive aviation tools, parts,

gauges, servicing equipment, inventory, and tooling.

The events leading up to and amounting to such bailment are proximately responsible for

the damages sustained by Mr. Hale in this matter.

VIII. CONDITIONS PRECEDENT

All conditions precedent have been performed or have occurred prior to Mr. Hale

bringing suit as required by the Tex. Civ. Prac. & Rem. Code.

IX. ATTORNEYS’ FEES

The preceding is incorporated by reference as if fully copied and set forth at length. As a

result of the events giving rise to this complaint, Mr. Hale has been required to retain the services

of counsel to prosecute this action. Mr. Hale additionally sues for reasonable attorneys’ fees and

legal expenses for the prosecution of this action to judgment and for any appeal therefrom.

X. AMEND PLEADINGS

Mr. Hale reserves the right to amend these pleadings.

9 XI. DEMAND FOR JURY TRIAL

Mr. Hale hereby makes demand for jury trial, as is his right under the Constitution and

laws of the State of Texas, and in accordance with Tex. R. Civ. P. 216(a), and tenders the

required jury fee concurrently herewith.

XII. PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendant/Counterplaintiff, Sidney B.

Hale, Jr. respectfully requests that Plaintiff/Counterdefendant, the City of Bonham, Texas, be

cited to appear and answer and that, on final trial, Mr. Hale have the following:

1. Judgment against Plaintiff/Counterdefendant for damages in an amount within the

jurisdictional limits of this Court, jointly and severally;

2. Judgment against Plaintiff/Counterdefendant in an amount within the

jurisdictional limits of this Court as special damages, jointly and severally;

3. Judgment against Plaintiff/Counterdefendant for exemplary and enhanced

damages to the maximum extent permitted by law, jointly and severally;

4. Prejudgment interest as provided by law, jointly and severally;

5. Post judgment interest as provided by law, jointly and severally;

6. Costs of suit, jointly and severally;

7. Attorneys’ fees and legal expenses to the maximum extent permitted by law,

jointly and severally; and

8. All such other and further relief, general or special, at law or in equity, to which

Mr. Hale may be justly entitled.

10 Respectfully submitted,

COATS & EVANS, P.C.

/s/ Gary L. Evans Gary Linn Evans Texas Bar No. 00795338 Email: evans@texasaviationlaw.com George Andrew Coats Texas Bar No. 00783846 Email: coats@texasaviationlaw.com P.O. Box 130246 The Woodlands, TX 77393-0246 Telephone: 281-367-7732 Facsimile: 281-367-8003

ATTORNEYS FOR DEFENDANT SIDNEY B. HALE, JR.

CERTIFICATE OF SERVICE

I certify that pursuant to Rule 21a of the Texas Rules of Civil Procedure a true and correct copy of the foregoing instrument has been delivered to all counsel of record on the 12th day of November, 2014.

/s/ Gary L. Evans Gary L. Evans

Mr. John Reenan Via Electronic Filing and/or jreenan@helmsgreene.com Facsimile No. 214-466-7915 Mr. Christopher S. Kilgore ckilgore@helmsgreene.com HELMS & GREENE, LLC 1700 Pacific Ave., Suite 3740 Dallas, Texas 75201 Telephone: 214-466-7910 Facsimile: 214-466-7915

11 A10 A11 CAUSE NO. CV-14-41722

CITY OF BONHAM § IN THE DISTRICT COURT OF § Plaintiff, § § v. § FANNIN COUNTY, TEXAS § SIDNEY B. HALE, JR. § § Defendant. § 336TH JUDICIAL DISTRICT

DEFENDANT SIDNEY B. HALE, JR.’S RESPONSE TO PLAINTIFF’S PARTIAL MOTION FOR SUMMARY JUDGMENT

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW, Defendant Sidney B. Hale, Jr. (“Mr. Hale” and/or “Defendant”) and files

this his Response to Plaintiff City of Bonham’s (the “City” and/or “Plaintiff”) Partial Motion for

Summary Judgment, and in support thereof, would respectfully show this Court the following:

I. JURISDICTIONAL FACTS

This Court has jurisdiction over this matter pursuant to Sections 101.001 et. seq. of the

Texas Civil Practice and Remedies Code because the Texas Legislature waived Plaintiff’s

sovereign immunity for claims involving negligence and premises defects.

The City is a governmental unit and owner of the premises. The condition of the roof of

the Hanger constitutes a premises defect. More specifically, the apex bolts that held the top seam

of the roof together were extensively corroded, undersized, and apparently had not been

inspected in decades, making the hangar unsafe for occupancy and/or use and posed an

unreasonable risk of harm. The City knew or should have known of the danger.

The City owed Mr. Hale the duty owed to an invitee under Texas law. The City breached

the duty owed to Mr. Hale by not adequately warning Mr. Hale of the condition and not making

1 the condition reasonably safe. The City’s breach proximately caused Mr. Hale’s injuries. If it

were a private person, the City, would be liable under Texas law.

No exception to the wavier of immunity bars the claim because no exception applies or

an exception to an exception reinstates the wavier. Notice was provided as required by the Texas

Tort Claims Act.

II. BACKGROUND FACTS

Plaintiff is the owner of a hangar on the grounds of the City of Bonham Airport (the

“Hangar”). On or about June 18, 1984, Mr. Hale entered into a lease agreement with the City for

the Hangar (the “Lease”). The Lease, by its own terms, expired after five years.

On or about December 8, 2013, the Hangar roof collapsed, causing extensive damages to

the hangar and the property contained therein (the “Incident”). The Hangar was used to conduct

Mr. Hale’s aircraft repair and maintenance business and to store multiple aircraft.

Prior to the Incident, Mr. Hale informed the City of the observed and deteriorating

condition of the hangar. The City, specifically Mr. Ronnie Ford, on behalf of the City,

unequivocally instructed Mr. Hale to immediately vacate the premises and to stay out of the

Hangar. There was a significant likelihood that had the center section of the structure been

supplementally supported at that time, the Hangar would not have collapsed. Indeed, it was not

until several hours later, after the City’s failure to act that the Hangar collapsed. Such action

represents an assumption of complete command and control over the premises, to the complete

and total exclusion of all other persons and entities. The City’s failure to reasonably protect the

Hangar from further collapse caused the damages incurred by Mr. Hale, at least in part.

2 Additionally, the City barred Mr. Hale from the property, which was saturated with ice

and water, for many weeks, during which all sorts of damage was done to his personal property,

including sensitive aviation tools, parts, gauges, servicing equipment, inventory, and tooling.

Following the Incident, an examination of the debris revealed that the apex bolts that held

the top seam of the roof together were extensively corroded, undersized, and apparently had not

been inspected in decades, making the hangar unsafe for occupancy and/or use. This presented

an unreasonably dangerous condition which posed an unreasonable risk of harm to Mr. Hale. The

City was aware of this condition, yet did nothing to make the premises safe. Further discovery

will be required to more fully determine what other and further duties the City breached in

connection with the Hangar, including any inspections that might be required under the City’s

statutes.

III. ARGUMENT AND AUTHORITIES

Sovereign immunity protects the State, its agencies and officials, and political

subdivisions of the State from suit, unless immunity from suit has been waived. Gen. Servs.

Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591, 594 (Tex. 2001). The sovereign immunity

of the State inures to the benefit of a municipality insofar as the municipality engages in the

exercise of governmental functions, except when that immunity has been waived. See Fort

Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000); City of Tyler v.

Likes, 962 S.W.2d 489, 501 (Tex. 1997); see also City of Houston v. Rushing, 39 S.W.3d 685,

686 (Tex. App.—Houston [1st Dist.] 2001, pet. denied) (stating, "The City of Houston, as a

home-rule municipality, is generally immune from both suit and liability in its governmental

functions.").

3 The Texas Tort Claims Act (“TCA”) establishes certain waivers of governmental

immunity. Likes, 962 S.W.2d at 494. The entity remains immune unless waived by the TCA.

Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225 (Tex. 2004). If the City was

performing a proprietary function, however, the TCA does not apply. See City of Corpus Christi

v. Absolute Industries, 120 S.W.3d 1, 4 (Tex.App.—Corpus Christi 2001, pet. denied); City of El

Paso v. Morales, No. 08-02-00484-CV, 2004 Tex. App. LEXIS 7806, *26-27 (Tex. App.—El

Paso Aug. 20, 2004, pet. denied). When a municipality commits a tort while engaged in

proprietary functions, it is liable to the same extent as a private entity or individual. Texas River

Barges v. City of San Antonio, 21 S.W.3d 347, 356 (Tex. App.—San Antonio 2000, pet. denied).

Under Section 101.0215 of the TCA, certain municipal functions are defined as

governmental and others as proprietary. See Tex. Civ. Prac. & Rem. Code §101.0215. The Texas

legislature has defined governmental functions as "those functions that are enjoined on a

municipality by law and are given it by the state as part of the state's sovereignty, to be exercised

by the municipality in the interest of the general public . . . ." Tex. Civ. Prac. & Rem. Code

§101.0215(a). Proprietary functions are "those functions that a municipality may, in its

discretion, perform in the interest of the inhabitants of the municipality . . . ." Tex. Civ. Prac. &

Rem. Code §101.0215(b); see also City of Gladewater v. Pike, 727 S.W.2d 514, 519 (Tex. 1987)

(proprietary function is one performed by a city, in its discretion, primarily for the benefit of

those within the corporate limits of the city, rather than for use by the general public). A

municipality retains its immunity for activities which the legislature has defined as

governmental, except to the extent immunity is waived by acts, omissions, and conditions as

specified in the TCA. See Williams v. City of Midland, 932 S.W.2d 679, 682 (Tex. App.—El

Paso 1996, no writ); Morales, 2004 Tex. App. LEXIS 7806 at *14-15.

4 Under Texas common law, determining whether a city is performed a proprietary or

governmental function has generally been evaluated by examining whether the act performed by

the city as the agent of the State in furtherance of general law for the interest of the public at

large, or whether it is performed by the city, in its discretion, primarily for the benefit of those

within the corporate limits of the city, rather than for the use by the general public. See

Gladewater, 727 S.W.2d at 519; Bailey v. City of Austin, 972 S.W.2d 180, 192-93 (Tex. App.—

Austin 1998, pet. denied). The key difference between a proprietary and governmental function

is that the city functions in its governmental capacity when it performs functions mandated by

the State. Truong v. City of Houston, 99 S.W.3d 204, 210 (Tex. App.—Houston [1st Dist.] 2002,

no pet.).

Under the TCA, a municipality is liable for damages arising under certain specified

governmental functions, including airports, including when used for space flight activities as

defined by Section 100A.001. Tex. Civ. Prac. & Rem. Code § 101.0215(a). Moreover, the TCA

states that the proprietary functions of a municipality do not include those governmental

activities listed under Subsection (a). Tex. Civ. Prac. & Rem. Code § 101.0215(c). Section

101.0215 lists numerous functions of a city that are designated as governmental. Many courts

have held that all activities associated with the operation of one of the government functions

listed in section 101.0215(a) are governmental and cannot be considered proprietary, regardless

of the city's motive for engaging in the activity. See e.g., Texas River Barges, 21 S.W.3d at 356-

57) (city's removal of barge company from marina is included within government function of

operating a marina and park even if removal was motivated by desire to protect city's profit by

exclusive contract with another barge company); City of Dallas v. Reata Constr. Corp., 83

S.W.3d 392, 395 (Tex. App.—Dallas 2002, pet. filed) (marking the location of water main is

5 encompassed by government function of "waterworks" and water services); Mitchell v. City of

Dallas, 855 S.W.2d 741, 744 (Tex. App.—Dallas 1993), aff'd, 870 S.W.2d 21 (Tex. 1994)

(refusing to consider that some activities related to the operation of a city park might be

proprietary where TTCA lists "parks and zoos" as government function). Consequently, all

activities related to the City of Bonham’s operation of the airport are considered governmental.

The Tort Claims Act provides a limited waiver of immunity for injuries caused by (1) use

of publicly owned automobiles, (2) premises defects, and (3) injuries arising out of conditions or

use of property. Miranda, 133 S.W.3d 217, 225 (Tex. 2004) [emphasis added]; see also Tex.

Civ. Prac. & Rem. Code § 101.021. The TCA also waives immunity from suit for all claims for

which it waives liability. See id. at § 101.025; Morales, 2004 Tex. App. LEXIS 7806 at *14-15.

Liability for premises defects is implied under Section 101.021(2) because a premises defect

arises from a condition existing on real property. City of Midland v. Sullivan, 33 S.W.3d 1, 6

(Tex. App.—El Paso 2000, pet. dism'd w.o.j.); Lamar Univ. v. Doe, 971 S.W.2d 191, 195 (Tex.

App.—Beaumont 1998, no pet.); Perez v. City of Dallas, 180 S.W.3d 906, 910 (Tex. App.—

Dallas 2005, no pet.).

If a claim arises from a premise defect, the governmental unit generally owes the

claimant the same duty that a private person owes to a licensee on private property. See Tex. Civ.

Prac. & Rem. Code § 101.022(a); State Dep't of Highways v. Payne, 838 S.W.2d 235, 237 (Tex.

1992); State v. Tennison, 509 S.W.2d 560, 562 (Tex. 1974). However, the governmental entity

owes the claimant the duty owed to an invitee, if the claimant pays for the use of the premises, as

is the case here. See Payne, 838 S.W.2d at 237; Tex. S. Univ. v. Gilford, 277 S.W.3d 65, 69-70

(Tex. App.—Houston [1st Dist.] 2009, pet. denied). If a plaintiff is an invitee, an owner is

required to use ordinary care to reduce or eliminate an unreasonable risk of harm created by a

6 premises condition of which the owner is or reasonably should be aware. Payne, 838 S.W.2d at

237; City of Galveston v. Albright, NO. 14-04-00072-CV, 2004 Tex. App. LEXIS 9693, *8-9

(Tex. App.—Houston [14th Dist.] Nov. 2, 2004, no pet.). In other words, the premises owner or

occupier has a duty to keep the premises in a reasonably safe condition and to inspect the

premises to discover any latent defects and to make safe any defect or give adequate warning.

Corbin v. Safeway Stores, Inc., 648 S.W.2d 292 (Tex. 1983); Adam Dante Corporation v.

Sharpe, 483 S.W.2d 452 (Tex. 1972). An invitee need only prove that the owner or occupier

knew or should have known of the condition. Mayer v. Willowbrook Plaza Ltd. P'ship, 278

S.W.3d 901, 910 (Tex. App.—Houston [14th Dist.] 2009, no pet.); City of Houston v. Cogburn,

No. 01-11-00318-CV, 2013 Tex. App. LEXIS 2827, *8 (Tex. App.—Houston [1st Dist.] Mar.

19, 2013, no pet.).

In a premises liability case, the plaintiff must establish (1) a legal duty owed to the

plaintiff, (2) breach of that duty, and (3) damages (4) proximately caused by the breach. See

Perez v. DNT Global Star, L.L.C., 339 S.W.3d 692, 700 (Tex. App.—Houston [1st Dist.] 2011,

no pet.). As with any other negligence action, a defendant in a premises liability case is liable

only to the extent it owes the plaintiff a legal duty. See Gen. Elec. Co. v. Moritz, 257 S.W.3d

211, 217 (Tex. 2008). As a rule, to prevail on a premises liability claim, a plaintiff must prove

that the defendant possessed—that is, owned, occupied, or controlled—the premises. See Wilson

v. Tex. Parks & Wildlife Dep't, 8 S.W.3d 634, 635 (Tex. 1999) (emphasis added). Moreover, an

invitee must establish the following elements to prevail on his premises liability claim: (1) the

premise owner or occupier had actual or constructive knowledge of a condition; (2) the condition

posed an unreasonable risk of harm; (3) the owner or occupier did not exercise reasonable care to

reduce or eliminate the risk; and (4) the owner or occupier's failure to use such care proximately

7 caused the plaintiff's injury. CMH Homes, Inc. v. Daenen, 15 S.W.3d 97, 99 (Tex. 2000); Hall v.

Sonic Drive-In of Angleton, Inc., 177 S.W.3d 636, 644 (Tex. App.—Houston [1st Dist.] 2005,

pet. denied).

In the case of a premises liability claim, to establish a waiver of immunity a plaintiff must

comply with both §101.021 and §101.022(a). See Tex. Civ. Prac. & Rem. Code §§ 101.021(2),

101.022(a); see e.g. Tennison, 509 S.W.2d at 561; City of Del Rio v. Felton, No. 04-06-00091-

CV, 2007 Tex. App. LEXIS 660, *8 (Tex. App.—San Antonio 2007, no pet.). Under Section

101.021(a), a governmental unit is liable for damages proximately caused by the wrongful act or

omission or the negligence of an employee acting within the scope of employment if (a) the

damages arise from the operation or use of a motor vehicle or equipment; and (b) the employee

would be personally liable to the claimant according to Texas law. Tex. Civ. Prac. & Rem. Code

§101.021(a). A governmental unit is also liable for damages caused by a condition or use of

tangible personal or real property if the governmental unit would, were it a private person, be

liable to the claimant according to Texas law. Tex. Civ. Prac. & Rem. Code §101.021(b)

[emphasis added]. Here, provided all elements of the claim were established at trial, the City

would absolutely be liable to Mr. Hale under the facts of this case.

Mr. Hale’s status as an invitee carries with it a greater duty of care by the City. Indeed,

the City is required to use ordinary care to reduce or eliminate an unreasonable risk of harm

created by a premises condition of which the owner is or reasonably should be aware. Payne, 838

S.W.2d at 237. When Mr. Hale informed the City of the unreasonable unsafe condition of the

hangar, the City, specifically Mr. Ronnie Ford, on behalf of the City, unequivocally instructed

Mr. Hale to immediately vacate the premises and to stay out of the Hangar. Not only did the City

prevent Mr. Hale from taking any action to protect his property from the unreasonable risk of

8 harm posed by the deteriorated roof, the City did absolutely nothing to reduce or eliminate the

risk of harm to Mr. Hale. The City assumed complete command and control over the property

when they ejected Mr. Hale and all other occupants from the property. The City then barred Mr.

Hale from re-entering the property for weeks, allowing all sorts of aircraft grade equipment and

tools to be exposed to the elements, either damaging it or losing it completely. To allow the City

to avoid liability for such egregious conduct goes against the spirit and intent of the Texas Tort

Claims Act. In other words, a City should not be allowed to voluntarily take on proprietary

functions, such as the management and leasing of property, operate with conscious indifference

to the rights, safety, or welfare of others, then escape all responsibility and liability for its

responsibilities and duties to its tenants (and the public). Consequently, the City’s Partial Motion

for Summary Judgment should be in all respects denied.

IV. CONCLUSION AND PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendant, Sidney B. Hale, Jr. respectfully

requests that Plaintiff, the City of Bonham’s Partial Motion for Summary Judgment be in all

respects denied. Defendant further requests all such other and further relief, general or special, at

law or in equity, to which he may be justly entitled.

9 Respectfully submitted,

COATS & EVANS, P.C.

/s/ Gary L. Evans Gary Linn Evans Texas Bar No. 00795338 Email: evans@texasaviationlaw.com George Andrew Coats Texas Bar No. 00783846 Email: coats@texasaviationlaw.com P.O. Box 130246 The Woodlands, TX 77393-0246 Telephone: 281-367-7732 Facsimile: 281-367-8003

ATTORNEYS FOR DEFENDANT SIDNEY B. HALE, JR.

CERTIFICATE OF SERVICE

I certify that pursuant to Rule 21a of the Texas Rules of Civil Procedure a true and correct copy of the foregoing instrument has been delivered to all counsel of record on the 30th day of December, 2014.

/s/ Gary L. Evans Gary L. Evans

Mr. Christopher S. Kilgore Via Electronic Filing and/or Dottie Sheffield Facsimile No. 972-532-6496 HELMS & KILGORE, PLLC 2201 Main Street, Suite 212 Dallas, Texas 75201 Telephone: 972-532-6484 Facsimile: 972-532-6496

ATTORNEYS FOR PLAINTIFF CITY OF BONHAM

10 A12 A13 CAUSE NO. CV-14-41722

CITY OF BONHAM § IN THE DISTRICT COURT OF § Plaintiff, § § v. § FANNIN COUNTY, TEXAS § SIDNEY B. HALE, JR. § § Defendant. § 336TH JUDICIAL DISTRICT

DEFENDANT SIDNEY B. HALE, JR.’S RESPONSE TO PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW, Defendant Sidney B. Hale, Jr. (“Mr. Hale” and/or “Defendant”) and files

this his Response to Plaintiff City of Bonham’s (the “City” and/or “Plaintiff”) Partial Motion for

Summary Judgment, and in support thereof, would respectfully show this Court the following:

I. BACKGROUND FACTS

Plaintiff is the owner of a hangar on the grounds of the City of Bonham Airport (the

“Hangar”). On or about June 18, 1984, Mr. Hale entered into a lease agreement with the City for

the Hangar (the “Lease”). The Lease, by its own terms, expired after five years.

On or about December 8, 2013, the Hangar roof collapsed, causing extensive damages to

the hangar and the property contained therein (the “Incident”). The Hangar was used to conduct

Mr. Hale’s aircraft repair and maintenance business and to store multiple aircraft.

Prior to the Incident, Mr. Hale informed the City of the observed and deteriorating

condition of the hangar. The City, specifically Mr. Ronnie Ford, on behalf of the City,

unequivocally instructed Mr. Hale to immediately vacate the premises and to stay out of the

1 Hangar. 1 There was a significant likelihood that had the center section of the structure been

supplementally supported at that time, the Hangar would not have collapsed. Indeed, it was not

until several hours later, after the City’s failure to act that the Hangar collapsed. Such action

represents an assumption of complete command and control over the premises, to the complete

and total exclusion of all other persons and entities. The City’s failure to reasonably protect the

Hangar from further collapse caused the damages incurred by Mr. Hale, at least in part.

Additionally, the City barred Mr. Hale from the property, which was saturated with ice

and water, for many weeks, during which all sorts of damage was done to his personal property,

including sensitive aviation tools, parts, gauges, servicing equipment, inventory, and tooling.

Following the Incident, an examination of the debris revealed that the apex bolts that held

the top seam of the roof together were extensively corroded, undersized, and apparently had not

been inspected in decades, making the hangar unsafe for occupancy and/or use. This presented

an unreasonably dangerous condition which posed an unreasonable risk of harm to Mr. Hale. The

City was aware of this condition, yet did nothing to make the premises safe. Further discovery

will be required to more fully determine what other and further duties the City breached in

connection with the Hangar, including any inspections that might be required under the City’s

statutes.

II. ARGUMENT AND AUTHORITIES

The Motion for Summary Judgment filed by the City is essentially a plea to the

jurisdiction, claiming that Defendant’s claims are barred by sovereign immunity. Indeed, a plea

to the jurisdiction is the proper vehicle by which a party contests a trial court’s authority to

determine the subject matter of a cause of action. State v. Lueck, 290 S.W.3d 876, 880 (Tex.

1 There are no disagreements or fact issues regarding Mr. Ford’s conduct, which is uncontroverted.

2 2009); Harris Cty. v. Sykes, 136 S.W.3d 635, 639 (Tex. 2004). A governmental unit may

properly challenge a trial court’s subject matter jurisdiction by filing a plea to the jurisdiction

since absent the state’s consent to suit a trial court has no subject matter jurisdiction. Tex. Dep’t.

of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999).

A trial court must not weigh the merits of the case, but instead consider only the

pleadings and evidence pertinent to the jurisdictional question. Bland Indep. Sch. Dist. v. Blue,

34 S.W.3df 547, 554 (Tex. 2000). In doing so, the trial court must construe the pleadings

liberally in favor of jurisdiction, Peek v. Equip. Serv. Co., 779 S.W.2d 802, 804 (Tex. 1989), and

must take all factual allegations plead as true, unless the governmental unit pleads and proves

that the allegations were fraudulently made in order to confer jurisdiction. Cont. Coffee Prods.

Co. v. Cazarez, 937 S.W.2d 444, 449 (Tex. 1996). If a party pleads facts that affirmatively

demonstrate an absence of jurisdiction and such defect is incurable, immediate dismissal of the

case is proper. Peek, 779 S.W.2d at 804-805. However, if the pleadings are insufficient to

demonstrate the court’s jurisdiction, but do not affirmatively show incurable defects in

jurisdiction, the proper remedy is to allow the plaintiff an opportunity to amend before

dismissing. Id.

1. The City is not Immune From Claims Arising out of its Proprietary Functions.

The City of Bonham is a home rule municipal corporation. As such it has broad powers

of self-government. City of Corpus Christi v. Continental Bus Systems, Inc., 445 S.W.2d 12, 16

(Tex. Civ. App.—Austin 1969, writ ref’d n.r.e.). Municipal corporations exercise their broad

powers through two different roles; proprietary and governmental. The governmental functions

of a municipal corporation have been defined as those acts which are public in nature and

performed by the municipality “as the agent of the State in furtherance of general law for the

3 interest of the public at large.” City of Crystal City v. Crystal City Country Club, 486 S.W.2d

887, 889 (Tex. Civ. App.—Beaumont 1972, writ ref’d n.r.e.). Proprietary functions are those

functions performed by a city, in its discretion, primarily for the benefit of those within the

corporate limit of the municipality. Id.

Under Texas common law, determining whether a city is performed a proprietary or

governmental function has generally been evaluated by examining whether the act performed by

the city as the agent of the State in furtherance of general law for the interest of the public at

large, or whether it is performed by the city, in its discretion, primarily for the benefit of those

within the corporate limits of the city, rather than for the use by the general public. See

Gladewater, 727 S.W.2d at 519; Bailey v. City of Austin, 972 S.W.2d 180, 192-93 (Tex. App.—

Austin 1998, pet. denied). The key difference between a proprietary and governmental function

is that the city functions in its governmental capacity when it performs functions mandated by

the State. Truong v. City of Houston, 99 S.W.3d 204, 210 (Tex. App.—Houston [1st Dist.] 2002,

no pet.). Here, the City voluntarily engaged in the business of owning and leasing real estate in

and around the Airport. This “real estate” aspect of the City is not a necessary component to the

operation of the Airport and is not a function mandated by the State, and thus, is a proprietary

function.

Unlike governmental functions, for which municipal corporations have traditionally been

afforded some degree of governmental immunity, proprietary functions have subjected municipal

corporations to the same duties and liabilities as those incurred by private persons and

corporations. See Turvey v. City of Houston, 602 S.W.2d 517 (Tex. 1980). While the doctrine of

governmental immunity protects municipalities from being sued for matters arising from the

performance of their governmental functions, no such protection exists for municipalities

4 performing their proprietary functions. City of Texarkana v. City of New Boston, 141 S.W.3d

778, 783 (Tex. App.—Texarkana 2004, pet. denied). Indeed, contracts made by municipal

corporations in their proprietary capacity have been held to be governed by the same rules as

contracts between individuals. Gates v. City of Dallas, 704 S.W.2d 737, 739 (Tex. 1986).

Consequently, in the present case, because the City was engaged in a proprietary function in the

ownership and leasing of real estate, governmental immunity does not apply to Defendant’s

claims for breach of contract and bailment.

2. No Waiver of Immunity is Necessary when No Immunity Exists

When the City entered into the lease agreement with Mr. Hale, the City was engaged in a

proprietary function, and thus no immunity against Defendant’s claims exists. In 2005, the

Legislature enacted Subchapter I of Chapter 271 of the Texas Local Government Code “to

loosen the immunity bar” by waiving immunity to suit for certain claims arising under written

contracts with governmental entities. See Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v.

Tex. Political Subdivisions Property/Casualty Joint Self-Insurance Fund, 212 S.W.3d 320, 326

(Tex. 2006). Indeed, Section 271.152’s waiver of immunity was intended to broaden, not narrow,

the scope of contract claims that could be filed against cities. The statutory waiver scheme is

inapplicable in contract cases in which no immunity exists in the first place, i.e., when a city

engages in a proprietary function. In the present case, the City was engaged in a proprietary

function in the ownership and leasing of real estate, and thus, governmental immunity does not

apply. Moreover, it was not necessary for the Legislature to provide a waiver of immunity for

contract and/or quasi-contractual claims where the governmental unit is acting in a proprietary

capacity, because there was no immunity to waive. Because the City was engaged in proprietary

5 functions, i.e. the ownership and leasing of real estate, there is no governmental immunity

applicable to Mr. Hale’s breach of contract and bailment claims.

When Mr. Hale informed the City of the unreasonable unsafe condition of the hangar, the

City, specifically Mr. Ronnie Ford, on behalf of the City, unequivocally instructed Mr. Hale to

immediately vacate the premises and to stay out of the Hangar. Not only did the City prevent Mr.

Hale from taking any action to protect his property from the unreasonable risk of harm posed by

the deteriorated roof, the City did absolutely nothing to reduce or eliminate the risk of harm to

Mr. Hale. The City assumed complete command and control over the property when they ejected

Mr. Hale and all other occupants from the property. The City then barred Mr. Hale from re-

entering the property for weeks, allowing all sorts of aircraft grade equipment and tools to be

exposed to the elements, either damaging it or losing it completely.

To allow the City to avoid liability for the egregious conduct demonstrated in the present

case goes against the spirit and intent of the doctrine of immunity. A City should not be allowed

to voluntarily take on proprietary functions, operate with conscious indifference to the rights,

safety, or welfare of others, then escape all responsibility and liability due to its tenants (and the

public) under the guise of immunity. Indeed, the doctrine of governmental immunity does not

give the City, or any other governmental unit, a “free pass” to ignore its duties and obligations

under the law and escape all responsibility for its actions. Consequently, the City’s Motion for

Summary Judgment should be in all respects denied.

IV. CONCLUSION AND PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendant, Sidney B. Hale, Jr. respectfully

requests that Plaintiff, the City of Bonham’s Motion for Summary Judgment be in all respects

6 denied. Defendant further requests all such other and further relief, general or special, at law or

in equity, to which he may be justly entitled.

Respectfully submitted,

COATS & EVANS, P.C.

/s/ Gary L. Evans Gary Linn Evans Texas Bar No. 00795338 Email: evans@texasaviationlaw.com George Andrew Coats Texas Bar No. 00783846 Email: coats@texasaviationlaw.com P.O. Box 130246 The Woodlands, TX 77393-0246 Telephone: 281-367-7732 Facsimile: 281-367-8003

ATTORNEYS FOR DEFENDANT SIDNEY B. HALE, JR.

CERTIFICATE OF SERVICE

I certify that pursuant to Rule 21a of the Texas Rules of Civil Procedure a true and correct copy of the foregoing instrument has been delivered to all counsel of record on the 5th day of February, 2015.

/s/ Gary L. Evans Gary L. Evans

Mr. Christopher S. Kilgore Via Electronic Filing and/or Dottie Sheffield Facsimile No. 972-532-6496 HELMS & KILGORE, PLLC 2201 Main Street, Suite 212 Dallas, Texas 75201 Telephone: 972-532-6484 Facsimile: 972-532-6496

7 ATTORNEYS FOR PLAINTIFF CITY OF BONHAM

8 A14 A15 CAUSE NO. CV-14-41722

CITY OF BONHAM § IN THE DISTRICT COURT OF § Plaintiff, § § v. § FANNIN COUNTY, TEXAS § SIDNEY B. HALE, JR. § § Defendant. § 336TH JUDICIAL DISTRICT

DEFENDANT SIDNEY B. HALE, JR.’S SURREPLY TO PLAINTIFF’S REPLY ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

TO THE HONORABLE JUDGE OF SAID COURT:

COMES NOW, Defendant Sidney B. Hale, Jr. (“Mr. Hale” and/or “Defendant”) and files

this his Response to Plaintiff City of Bonham’s (the “City” and/or “Plaintiff”) Partial Motion for

Summary Judgment, and in support thereof, would respectfully show this Court the following:

I. The Texas Supreme Court in Tooke v. City of Mexia, did recognize that a municipality is

not immune from suit for torts committed in the performance of its proprietary functions, as it is

for torts committed in the performance of its government functions. 197 S.W.3d 325, 343 (Tex.

2006). Additionally, while the Court indicated that they have not held that the same distinction

determines whether immunity was waived in suits involving breach of contract claims, the Court

also did not indicate that the distinction does not apply. Id. Rather, the Court determined that it

was not necessary to make that determination based on the facts presented in Tooke. Indeed, the

Court held that, “even if the City were not immune from suit for breach of a contract whose

subject lies within its proprietary functions, the Tookes’ contract does not qualify.” Id. at 344.

This leaves the door open for the Court to make that determination at a later date.

1 The Texas Tort Claims Act was enacted in 1985, well before the decision was entered in

Tooke. Since the enactment of Section 271.152 of the Local Government Code in 2005, the

Supreme Court has not yet revisited whether or not the proprietary-governmental dichotomy

applicable in tort cases is also applicable in breach of contract cases. While the Fourth Court of

Appeals in San Antonio has held that this distinction does not apply in contract cases, the

decisions of that Court are not binding on the present court. Absent a decision to the contrary by

the Texas Supreme Court, there is no authority mandating that this Court find that the

proprietary-governmental function distinction does not apply in the present case. Indeed, the

Gates case, whereby the Texas Supreme Court recognized that contracts made by municipal

corporations in their proprietary capacity have been held to be governed by the same rules as

contracts between individuals, Gates v. City of Dallas, 704 S.W.2d 737, 739 (Tex. 1986), has not

been overturned and still constitutes good law.

Consequently, because the City was engaged in a proprietary function in the ownership

and leasing of real estate, governmental immunity does not apply to Defendant’s claims for

breach of contract and bailment. Thus, Plaintiff’s motion for summary judgment should be

denied.

II. CONCLUSION AND PRAYER

WHEREFORE, PREMISES CONSIDERED, Defendant, Sidney B. Hale, Jr. respectfully

requests that Plaintiff, the City of Bonham’s Motion for Summary Judgment be in all respects

denied. Defendant further requests all such other and further relief, general or special, at law or

in equity, to which he may be justly entitled.

2 Respectfully submitted,

COATS & EVANS, P.C.

/s/ Gary L. Evans Gary Linn Evans Texas Bar No. 00795338 Email: evans@texasaviationlaw.com George Andrew Coats Texas Bar No. 00783846 Email: coats@texasaviationlaw.com P.O. Box 130246 The Woodlands, TX 77393-0246 Telephone: 281-367-7732 Facsimile: 281-367-8003

ATTORNEYS FOR DEFENDANT SIDNEY B. HALE, JR.

CERTIFICATE OF SERVICE

I certify that pursuant to Rule 21a of the Texas Rules of Civil Procedure a true and correct copy of the foregoing instrument has been delivered to all counsel of record on the 11th day of February, 2015.

/s/ Gary L. Evans Gary L. Evans

Mr. Christopher S. Kilgore Via Electronic Filing and/or Dottie Sheffield Facsimile No. 972-532-6496 HELMS & KILGORE, PLLC 2201 Main Street, Suite 212 Dallas, Texas 75201 Telephone: 972-532-6484 Facsimile: 972-532-6496

ATTORNEYS FOR PLAINTIFF CITY OF BONHAM