City of Dallas v. Albert

• Decision Date: 21 December 2006
• Docket Number: No. 05-03-01298-CV.,No. 05-03-01299-CV.,No. 05-03-01300-CV.,No. 05-03-01297-CV.,05-03-01297-CV.,05-03-01298-CV.,05-03-01299-CV.,05-03-01300-CV.
• Citation: 214 S.W.3d 631
• Parties: CITY OF DALLAS, Appellant, v. Kenneth E. ALBERT, et al., Appellees. City of Dallas, Appellant, v. David L. Barber, et al., Appellees. City of Dallas, Appellant, v. Anthony Arredondo, et al., Appellees. City of Dallas, Appellant, v. Kevin Michael Willis, et al., Appellees.
• Court: Texas Court of Appeals

214 S.W.3d 631

CITY OF DALLAS, Appellant, v.Kenneth E. ALBERT, et al., Appellees.

City of Dallas, Appellant, v.David L. Barber, et al., Appellees.

City of Dallas, Appellant, v.Anthony Arredondo, et al., Appellees.

City of Dallas, Appellant, v.Kevin Michael Willis, et al., Appellees.

No. 05-03-01297-CV.

No. 05-03-01298-CV.

No. 05-03-01299-CV.

No. 05-03-01300-CV.

Court of Appeals of Texas, Dallas.

December 21, 2006.

Rehearing Overruled February 22, 2007.

Madeleine B. Johnson, City Attorney, James B. Pinson, Assistant City Attorney, Dallas, for appellant.

Bill Boyd, John R. Stooksberry, Boyd & Veigel, P.C., McKinney, for appellees.

Before Justices MORRIS, FITZGERALD, and FRANCIS.

OPINION ON REHEARING

Opinion by Justice MORRIS.

We issued our original opinion in the above referenced cases on August 10, 2004.SeeCity of Dallas v. Kenneth E. Albert,140 S.W.3d 920(Tex.App.-Dallas 2004, no pet.).In that opinion, we concluded the Texas Supreme Court's holding in Reata Construction Corp. v. City of Dallas,47 Tex. Sup.Ct. J. 408, 2004 WL 726906(Tex.Apr. 2, 2004)(per curiam) compelled us to decide that the City of Dallas had waived its sovereign immunity in these suits by filing counterclaims for affirmative relief.We therefore affirmed the trial court's orders denying the City's pleas to the jurisdiction.The City filed motions for rehearing in each cause.We held the motions under advisement because of the supreme court's announced reconsideration of its Reata opinion upon which we relied.

On June 30, 2006, the Texas Supreme Court withdrew its original opinion in Reata and substituted a new opinion in its place.SeeReata Constr. Corp. v. City of Dallas,197 S.W.3d 371(Tex.2006).In its new opinion, the supreme court limited the extent of the waiver of sovereign immunity caused by the City's filing claims for affirmative relief.Seeid. at 377.Because the Texas Supreme Court significantly changed its analysis on which we relied when deciding the issue of waiver of sovereign immunity in our original opinion, we grant the City's motion for rehearing and withdraw our opinion issued August 10, 2004.This is now the opinion of this Court.¹

I.

These cases arose out of an ordinance adopted by the City of Dallas in 1979 in accordance with a voter-approved pay referendum.The ordinance stated, among other things, that each sworn police officer, fire fighter, and rescue officer employed by the City would receive a pay raise and that "the current percentage pay differential between grades in the sworn ranks of the Dallas Police Force and the Fire Fighter and Rescue Force shall be maintained."Appellees contend the ordinance amended their alleged employment contracts with the City to add a requirement that the City maintain the percentage pay differential between the grades in all future salary adjustments.Appellees filed suits claiming the City breached its contracts with them by repeatedly raising the pay of the highest ranking officers without making corresponding increases to the salaries received by the lower ranks.Appellees asserted claims for breach of contract seeking back pay, benefits, and prejudgment and post-judgment interest.Appellees also sought a declaratory judgment to establish that their construction of the ordinance was correct.

In response to appellees' claims, the City filed answers and counterclaims for alleged overpayments of salaries.According to the City, if appellees' construction of the ordinance was correct, then all salary adjustments made after the ordinance was adopted were void and unenforceable.The City argued that if the salary adjustments were unenforceable, appellees were required to return to the City any additional money paid to them pursuant to the allegedly void salary adjustments.

On June 4, 2003, the City filed pleas to the trial court's jurisdiction contending that its governmental immunity from suit had not been waived and, therefore, the trial court lacked subject matter jurisdiction over each case.Appellees responded that the City's immunity from suit was expressly waived in both section 51.075 of the Texas Local Government Codeandchapter II of the Dallas City Charter.Specifically, the Local Government Code states that a municipality may "plead and be impleaded in any court."SeeTEX. LOCAL GOV'T CODE ANN. § 51.075(Vernon 1999).The Dallas City Charter states that the City has the power to "sue and be sued" and to "implead and be impleaded in all courts."DALLAS CITY CHARTER ch. II, § 1(2), (3)(Aug. 1999).Appellees additionally argued the City was collaterally estopped from asserting sovereign immunity because the City litigated the same issue in another case and the Fifth Circuit Court of Appeals decided the issue adversely to the City.The trial court denied the City's pleas to the jurisdiction, and the City appealed.

During the pendency of the City's appeal, the Texas Supreme Court issued its original opinion in Reata Construction Corp. v. City of Dallas.In Reata,the supreme court held that a city's intervention in a lawsuit to assert claims for affirmative relief constituted a waiver of governmental immunity.SeeReata Constr. Corp. v. City of Dallas,47 Tex. Sup.Ct. J. 408, 2004 WL 726906(Tex.Apr. 2, 2004)(per curiam).Following issuance of the Reata decision, appellees in these cases supplemented their briefing to argue that the City's counterclaims for alleged overpayments were claims for affirmative relief invoking the trial court's jurisdiction much like the City's intervention in Reata.According to appellees, Reata provided another basis to affirm the trial court's denial of the City's plea to the jurisdiction.The City responded by voluntarily dismissing its counterclaims.It then argued that the dismissal of the counterclaims rendered appellees' supplemental argument moot.

Approximately two years after issuing its original opinion in Reata, the Texas Supreme Court withdrew its opinion and issued a new opinion limiting the waiver of governmental immunity caused by a governmental entity's assertion of claims for affirmative relief.SeeReata,197 S.W.3d at 377.The supreme court also on the same day issued its opinion in Tooke v. City of Mexia,197 S.W.3d 325(Tex.2006).In Tooke,the court addressed the impact of phrases such as "sue and be sued" and "plead and be impleaded" on governmental immunity.The court concluded such phrases did not reflect, in and of themselves, a clear legislative intent to waive immunity.In light of the Texas Supreme Court's recent decisions in Reata and Tooke, we must re-examine the trial court's orders denying the City's pleas to the jurisdiction.

II.

It is well established that sovereign immunity from suit protects the State of Texas, its agencies, and its officials from lawsuits for damages unless it is waived by clear and unambiguous legislative consent to suit.SeeFed. Sign v. Tex. S. Univ.,951 S.W.2d 401, 405(Tex.1997).A city, such as the City of Dallas, is deemed an agent of the state for sovereign immunity purposes when exercising its powers for a public purpose.SeeReata,197 S.W.3d at 377.Appellees' suit against the City is a lawsuit arising out of the City's exercise of its power to adopt public ordinances.Accordingly sovereign immunity from suit protects the City, and the court lacks subject matter jurisdiction over these cases unless unambiguous consent to be sued has been granted.

Appellees contend that consent was granted by the legislature in section 51.075 of the Texas Local Government Code where the legislature stated that municipalities "may plead and be impleaded in any court."SeeTEX. LOCAL GOV'T CODE ANN. § 51.075.Appellees further argue that consent to suit can be found also in chapter II of the Dallas City Charter, which states that the City has the power to "sue and be sued" and to "implead and be impleaded in all courts."DALLAS CITY CHARTER ch. II, § 1(2), (3)(Aug. 1999).

In Tooke,the supreme court held the phrases "sue and be sued" and "plead and be impleaded" mean different things in different statutes and do not, by themselves, waive immunity.SeeTooke,197 S.W.3d at 342.The court also specifically stated that neither section 51.075 of the Texas Local Government Code nor a city charter provision addressing the capacity of the City of Mexia to "sue and be sued" and "plead and be impleaded" is a clear and unambiguous waiver of immunity.Seeid. at 342-43.The court followed its Tooke ruling in Reata v. City of Dallas and held that, as with the charter for the City of Mexia, the "sue and be sued" and "plead and be impleaded" language in the Dallas City Charter did not waive the City's immunity from suit.SeeReata,197 S.W.3d at 378.Accordingly, we must likewise conclude that neither section 51.075 of the Texas Local Government Code nor the Dallas City Charter grants the trial court jurisdiction over appellees' claims in these cases.²

As an alternative basis for finding jurisdiction and affirming the trial court's orders, appellees argue that the City's counterclaims seeking affirmative monetary relief against them waived the City's sovereign immunity from suit.For the purposes of our analysis, we will assume the City's decision to bring counterclaims waived its immunity from suit for appellees' claims in these cases to the extent set forth in Reata.What we determine is the effect, if any, of the City's decision to withdraw its counterclaims.Applying Reata and its underlying rationale, we conclude that, to the extent the City may have waived its immunity from suit in these cases by filing counterclaims, it reinstated its immunity from suit when it dismissed its counterclaims.

In Reata, the Texas Supreme Court held that a "decision by the City of Dallas to file suit for damages encompassed a decision to leave its sphere of immunity from suit for claims against it which are germane to, connected with and properly defensive of claims the City...