Taylor Hous. Auth. v. Shorts

549 S.W.3d 865
CourtCourt of Appeals of Texas
DecidedApril 26, 2018
DocketNO. 03-16-00274-CV; NO. 03-16-00276-CV
StatusPublished
Cited by14 cases

This text of 549 S.W.3d 865 (Taylor Hous. Auth. v. Shorts) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Taylor Hous. Auth. v. Shorts, 549 S.W.3d 865 (Tex. Ct. App. 2018).

Opinion

Bob Pemberton, Justice *868In these two causes, the Taylor Housing Authority (THA) appeals a temporary injunction and a second order denying a plea to the jurisdiction THA had asserted as to counterclaims seeking additional relief against it. We will affirm the temporary injunction. However, because governmental immunity bars a portion of the relief sought through the counterclaims at issue, we must affirm the jurisdictional order in part and reverse and dismiss in part.

BACKGROUND

THA is a "municipal housing authority" created by the City of Taylor under Chapter 392 of the Local Government Code,1 but is a separate governmental entity that has its own five-commissioner governing body.2 THA commenced the underlying litigation in January 2015-at the behest of federal housing authorities, it claims-to remedy perceived deficiencies in the ownership and operation of three public-housing projects: the Sunset Apartments, a 64-unit complex that THA had constructed in 1977; the Mallard Run Apartments, a 40-unit complex that THA had acquired in 1993; and the Market Apartments, a seven-unit complex that THA had acquired in 2003.

While the parties vigorously dispute many of the underlying facts and their legal significance, there appears to be general agreement regarding certain events that gave rise to the controversy and ensuing litigation. Although THA had once owned all three of the housing projects, it had since formed two nonprofit, 501(c)(3) corporations-appellee Taylor Sunset Housing Development (TSHD) and appellee Mallard Run Housing Development (MRHD)-conveyed record title to the Sunset project to TSHD in 1988, and similarly deeded the Mallard Run project to MRHD in 2001. Despite the ownership change, the projects had initially remained under the control of the THA commissioners because the governing boards of both TSHD and MRHD were then composed of those same five commissioners. The three entities likewise shared a common executive director, who during relevant times was appellee Steve A. Shorts. But through a series of now-disputed measures that THA attributes chiefly to Shorts, the corporate articles for both TSHD and MRHD were amended in 2008 to provide for independent governing boards. Around the same time, TSHD and MRHD also assumed from THA, at least in name,3 operational control over their respective projects, including collection of rental revenues, property maintenance, and other functions typical of a landlord. MRHD also assumed similar control over the Market Apartments, *869although it is undisputed that record title for this property remained with THA.

Apparently the three projects were operated in this manner for several years without incident. The controversy arose, according to THA, after its commissioners discovered through an independent auditor's report in 2012 or 2013 that the mortgage on the Market Apartments (the project to which THA still held title) had been paid off by or through MRHD in anticipation that THA (or more precisely Shorts on THA's purported behalf, as THA now portrays the situation) would convey title to the property to MRHD. The ensuing fallout included Shorts's resignation as THA's executive director (although he remained in that role with MRHD for a period thereafter), THA's refusal to convey title of the Market Apartments to MRHD, and the present litigation.

The general focus of THA's litigation efforts has been to clarify or seize (with the distinction depending on the parties' perspectives and the property at issue) legal and fiscal control over MRHD, TSHD, and the three housing projects. THA's strategic focus has evolved over time, however, and the issues in the two appeals each derive from what can be considered different phases of the litigation.

Initially, THA sued Shorts, TSHD, and MRHD, emphasizing allegations to the effect that the 2001 conveyance of the Mallard Run project to MRHD, the 2008 restructurings of the MRHD and TSHD corporate boards, any relinquishment of THA's operational control over the three projects, and the abortive conveyance of title to the Market Apartments had furthered an unauthorized and fraudulent scheme orchestrated by Shorts to divert assets and rental revenues properly belonging to THA instead to the benefit of TSHD, MRHD, or Shorts and members of his family. Based on these allegations, THA sought monetary recovery from Shorts under tort theories and, more critically here, what were styled as claims for declaratory and equitable relief against TSHD and MRHD, accompanied by a claim for the attorney's fees that would be recoverable under the Uniform Declaratory Judgments Act (UDJA).4 The thrust of the claims against TSHD and MRHD was to seek to establish THA's ownership of the Market Apartments, invalidate the 2001 deed conveying the Mallard Run project to MRHD and the 2008 restructuring of the MRHD and TSHD corporate boards, restore THA's operational and fiscal control over the three housing projects, and recover assets allegedly diverted wrongfully from THA.

After filing suit, THA undertook additional efforts to take operational control of the Market Apartments away from MRHD, including sending letters to project residents advising of a "management change" and instructing them to send their lease payments to THA. MRHD responded to these efforts by seeking a temporary restraining order and later temporary injunction to bar these or other actions by THA that would interfere with its management of the Market Apartments or the Mallard Run project, or with TSHD's management of the Sunset project. The parties ultimately resolved this facet of the controversy, at least temporarily, by entering into a Rule 11 agreement to govern the relationship of THA, MRHD, and TSHD with respect to the three housing projects "until determination of management and ownership of the [projects] is made, upon final hearing or otherwise." The gravamen of this Rule 11 agreement was that THA would operate the Market Apartments during the litigation (including "performing *870all responsibilities and duties required of the landlord/owner/manager of the Market Apartments required under any agreement or applicable laws, [such as] performing all ongoing maintenance and repairs to the properties, paying for insurance and property taxes, performing lawn maintenance and ... extermination services"),5 while MRHD and TSHD would similarly continue their respective operation of the Mallard Run and Sunset projects.6 Of particular relevance, the agreement specified the following in regard to THA's duties:

THA agrees to the current status quo with regard to the remaining two properties (Sunset/Heritage Apartments and Mallard Run Apartments) while this litigation is pending. That is[,] THA shall refrain from taking any action with regard to those properties similar to that taken by THA with regard to the Market [A]partments including, but not limited to[,] unauthorized assumption of management and/or contract with residents.

MRHD also asserted, in the same pleading containing its request for a TRO, counterclaims against THA seeking two categories of relief relating to the Market Apartments. First, MRHD sought remedy for THA's refusal to convey MRHD title to the Market Apartments.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Antony McGregor Dey v. Seilevel Partners, LP
Court of Appeals of Texas, 2022
Robert L. Malcom v. Cobra Acquisitions, LLC
Court of Appeals of Texas, 2020

Cite This Page — Counsel Stack

Bluebook (online)
549 S.W.3d 865, Counsel Stack Legal Research, https://law.counselstack.com/opinion/taylor-hous-auth-v-shorts-texapp-2018.