Baker v. City of Robinson

• Decision Date: 02 December 2009
• Docket Number: No. 10-07-00398-CV.,10-07-00398-CV.
• Citation: 305 SW 3d 783
• Parties: Doye BAKER and Doye Baker, L.P., Appellants, v. The CITY OF ROBINSON, Appellee.
• Court: Texas Court of Appeals

305 S.W.3d 783

Doye BAKER and Doye Baker, L.P., Appellants, v. The CITY OF ROBINSON, Appellee.

No. 10-07-00398-CV.

Court of Appeals of Texas, Waco.

December 2, 2009.

Robert J. Hanley, Neville & Hanley, Vance Dunnam & Christie L. Ryan, Dunnam & Dunnam, LLP, Waco, for appellants.

Charles D. Olson, Haley & Olson PC, Waco, for appellee.

Before Justice REYNA, Justice DAVIS, and Judge TRUDO.^*

OPINION

MARTHA JANE TRUDO, Judge (Assigned).

Doye Baker and Doye Baker, L.P. filed suit against the City of Robinson for breach of contract and statutory fraud because of the City's alleged misrepresentation regarding the zoning for property Baker purchased from the City. The trial court granted the City's summary-judgment motion. Baker presents ten issues challenging the summary judgment. His appellate complaints generally concern the City's governmental immunity, the merits of his fraud claim, and Doye Baker, L.P.'s standing. We will affirm in part and reverse and remand in part.

Background

The parties' dispute centers on a building which formerly housed the Robinson Nursing Home. The nursing home ceased doing business at some point in 1998, and the owners offered to donate the building to the City. After an environmental study was done, the City accepted the donation because it was "sorely in need of space for office space." The City soon determined that it would not be economically feasible to renovate the building to meet the City's needs, so bids were solicited for the sale of the property.

Baker purchased the property in 1999 with the intent to convert it to apartments for senior citizens. He began repairs and renovation work within a few months. He conveyed the property to Doye Baker, L.P. (the "Partnership") by special warranty deed in 2002. The City building inspector, Tracy Lankford, inspected various aspects of the work in 2002, 2003 and 2004. Although it is disputed, Baker testified that he requested a certificate of occupancy when about thirty-five units were finished but was told by Lankford that a certificate of occupancy would not be issued until all the units were finished.¹ At some point, Lankford advised Baker that, because the property was zoned for single-family residential housing, he would need to apply for rezoning to multi-family residential.

Baker believed the property was zoned commercial and pursued a hearing before the City's Board of Adjustment. At the mayor's suggestion, Baker applied for a change of zoning in February 2005. The application was approved within a month.

Baker filed suit in January 2006 alleging that the City originally represented to him that the property was zoned commercial "which would have included use as a multi-family structure." Baker claims that this alleged misrepresentation constitutes a breach of the contract of sale and statutory fraud under section 27.01 of the Business and Commerce Code.

The City filed a motion for summary judgment premised on both traditional and no-evidence grounds. The City argued that it was entitled to judgment as a matter of law because of governmental immunity and alternatively on the merits. The motion also challenged the Partnership's standing and Baker's capacity to sue on behalf of the Partnership. The trial court granted the City's summary-judgment motion without specifying the basis for its ruling.

Standard of Review

If the defendant files a traditional summary-judgment motion, then the defendant as movant must negate at least one of the elements of the plaintiff's cause of action, or alternatively, the defendant must conclusively establish each element of an affirmative defense. Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997); Johnson v. Baylor Univ., 188 S.W.3d 296, 300 (Tex.App.-Waco 2006, pet. denied); see City of Dallas v. Jennings, 142 S.W.3d 310, 315 (Tex.2004) ("We next consider whether the City conclusively established governmental immunity"). The nonmovant need not respond to the motion for summary judgment unless the defendant meets its burden of proof. Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222-23 (Tex.1999); Johnson, 188 S.W.3d at 300. But if the movant meets its burden of proof, the nonmovant must present summary-judgment evidence to raise a fact issue. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex.1995); Johnson, 188 S.W.3d at 300.

In reviewing a traditional summary judgment, we determine whether reasonable and fair-minded jurors could differ in their conclusions in light of all of the evidence presented. See Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex.2007) (per curiam) (citing Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566, 568 (Tex.2006) (per curiam); City of Keller v. Wilson, 168 S.W.3d 802, 822-24 (Tex. 2005)). We must consider all the evidence in the light most favorable to the nonmovant, indulging every reasonable inference in favor of the nonmovant and resolving any doubts against the movant. See Goodyear Tire, 236 S.W.3d at 756 (citing Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex.2006) (per curiam); Spates, 186 S.W.3d at 568).

We apply the same standard in reviewing a no-evidence summary judgment as we would in reviewing a directed verdict. See Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex.2006). "We review the evidence presented by the motion and response in the light most favorable to the party against whom the summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not." Id. at 582. A no-evidence summary judgment will be defeated if the nonmovant produces some evidence "raising an issue of material fact" on the elements challenged by the movant. Id.

We conduct a de novo review of a summary judgment. Valence Operating Co. v Dorsett, 164 S.W.3d 656, 661 (Tex.2005); In re Estate of Alexander, 250 S.W.3d 461, 464 (Tex.App.-Waco 2008, pet. denied). "When the trial court does not specify the basis for its summary judgment, the appealing party must show it is error to base it on any ground asserted in the motion." Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.1995); Alexander, 250 S.W.3d at 464.

The Partnership

Baker and the Partnership contend in their tenth issue that the court erred by granting summary judgment on the ground that they lack legal capacity to sue because the City has not filed a verified pleading challenging their capacity. See TEX.R. CIV. P. 93(1). However, they misconstrue this aspect of the City's summary-judgment motion.

The City argued in its summary-judgment motion that the Partnership lacks standing to sue because it was not a party to the contract for sale and had not yet come into existence when the alleged misrepresentation was made. See Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex.2005) (standing may be raised at any time). "A fraud claim is personal to the defrauded party." Vial v. Gas Solutions, Ltd., 187 S.W.3d 220, 227 (Tex.App.-Texarkana 2006, no pet.) (citing Nobles v. Marcus, 533 S.W.2d 923, 927 (Tex.1976)). Because the Partnership did not exist when the alleged misrepresentation was made, the Partnership cannot be a defrauded party in this instance. See Nobles, 533 S.W.2d at 927. Any fraud claim² arising from the alleged misrepresentation can be asserted by only Baker himself. Id. Thus, the Partnership lacks standing to assert a fraud claim. See Gonzalez v. Greyhound Lines, Inc., 181 S.W.3d 386, 393 (Tex.App.-El Paso 2005, pet. denied). Baker's tenth issue is overruled in part.

Capacity to Recover Damages

Baker also contends in his tenth issue that the court erred by granting summary judgment on the ground that he lacks legal capacity to recover on behalf of the Partnership because the City has not filed a verified pleading challenging his capacity. See TEX.R. CIV. P. 93(2).

The City argued in its summary-judgment motion that Baker "lacks standing" to recover lost profits allegedly suffered by the Partnership. However, this is an issue of capacity, not standing. See Swinnea v. ERI Consulting Eng'rs, Inc., 236 S.W.3d 825, 833 (Tex.App.-Tyler 2007, no pet.); Bossier Chrysler Dodge II, Inc. v. Rauschenberg, 201 S.W.3d 787, 797-98 (Tex. App.-Waco 2006), rev'd in part on other grounds, 238 S.W.3d 376 (Tex.2007) (per curiam); Willis v. Donnelly, 118 S.W.3d 10, 49 (Tex.App.-Houston 14th Dist. 2003), rev'd in part on other grounds, 199 S.W.3d 262 (Tex.2006). Baker correctly states that the City has failed to challenge his capacity by verified pleading. Thus, the City cannot complain of any lack of capacity on Baker's part to sue or recover on behalf of the Partnership. See Pledger v. Schoellkopf, 762 S.W.2d 145, 146 (Tex. 1988) (per curiam); Swinnea, 236 S.W.3d at 833; Willis, 118 S.W.3d at 49. Baker's tenth issue is sustained in part.

Governmental Immunity³

Baker contends in his first issue that the City failed to conclusively establish its immunity from suit because the underlying transaction involved a proprietary rather than a governmental function.

"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 governmental functions." Tooke v. City of Mexia, 197 S.W.3d 325, 343 (Tex. 2006). Therefore, we conduct a two-step inquiry to determine whether a municipality has immunity from suit. Tex. Bay Cherry Hill, L.P. v. City of Fort Worth, 257 S.W.3d 379, 389 (Tex.App.-Fort Worth 2008, no pet.); Ethio Express Shuttle Serv., Inc. v. City of Houston, 164 S.W.3d 751, 754 n. 4 (Tex.App.-Houston 14th Dist. 2005, no pet.). First, we determine whether the function is governmental or proprietary. Id.; see City of White Settlement v. Super Wash, Inc., 198 S.W.3d 770, 776 n. 4 (Tex.2006) ("Determining whether a function is governmental in nature is critical under the Tort Claims Act, because the Act only applies when a city is acting in its governmental capacity; the...