City of Fort Worth v. Groves

• Court: Texas Court of Appeals
• Writing for the Court: LATTIMORE; KELTNER, J., files a dissenting opinion in which FARRIS; KELTNER; FARRIS
• Citation: City of Fort Worth v. Groves, 746 S.W.2d 907 (Tex. App. 1988)
• Decision Date: 25 February 1988
• Docket Number: No. 2-87-017-CV,2-87-017-CV
• Parties: CITY OF FORT WORTH, Appellant, v. Ken GROVES, Appellee.

Page 907

746 S.W.2d 907

CITY OF FORT WORTH, Appellant, v. Ken GROVES, Appellee.

No. 2-87-017-CV.

Court of Appeals of Texas Fort Worth.

Feb. 25, 1988.

Rehearing Denied March 31, 1988.

William W. Wood, Asst. City Atty., Dalton Gandy, Asst. Dist. Atty., Fort Worth, for appellant.

Hill, Heard, Oneal, Gilstrap & Goetz, P.C., Frank Gilstrap, Ned Webster, Marcia Wise, Arlington, for appellee.

Before the court en banc.

OPINION

LATTIMORE, Justice.

Appellee, Ken Groves, filed the instant lawsuit pursuant to the Texas Uniform Declaratory Judgments Act, TEX.CIV.PRAC. & REM.CODE ANN. sec. 37.001 et seq. (Vernon 1986), seeking a declaratory judgment and permanent injunction to invalidate an agreement between Tarrant County and the City of Fort Worth, signed August 26, 1986, by which Tarrant County "leased" the Tarrant County Convention Center to appellant, the City of Fort Worth.

After a non-jury trial, the court below declared the lease agreement void, entered a permanent injunction against the defendants ¹ and awarded attorneys' fees against all defendants, jointly and severally.

Appellant asserts thirty-six points of error attacking the trial court's determination of standing; sufficiency of the evidence; compliance with the Open Meetings Act; compliance with bond requirements; the findings of the trial court that the lease is a gift; the lending of credit by the City of Fort Worth ("City"); entering into the lease being an arbitrary and capricious act and a breach of a fiduciary duty on the part of the Commissioners' Court; and the lease as a sale.

The judgment is affirmed in part, reversed and rendered in part.

We are indebted to the attorneys for the parties, Ken Groves and the City of Fort Worth, and to the attorneys for the amicus curiae, the Greater Fort Worth Hotel-Motel Association, Downtown Fort Worth, Inc., The Texas Municipal League and The Texas City Attorney's Association, for their excellent briefs.

THE HISTORY

In 1964, Tarrant County voters approved the issuance of 16.5 million dollars of general obligation bonds. A portion of the funds from the sale of the bonds was used to build the Tarrant County Convention Center ("TCCC") and the remainder to build Turnpike Stadium in Arlington, Texas.

In 1968, the Commissioners' Court approved the issuance of $2,000,000 in First Mortgage special revenue bonds for the construction of a parking facility adjacent to the TCCC; these bonds are not payable from tax proceeds, but from the revenue of the parking area that the bonds were issued to construct.

In 1980, voters approved 20.35 million dollars in general obligation bonds, 11.5 million dollars of which went into TCCC. The total unpaid balance of general obligation bonds attributable to the TCCC is $8,250,000.

By 1983, TCCC was becoming an increasing financial drain to Tarrant County ("County"). A committee was appointed by County Judge Mike Moncrief, the Mayor of Fort Worth, and the head of Fort Worth Chamber of Commerce. With the purpose of having broad representation from all areas of interest in TCCC, the committee consisted of the following: Rice Tilley as chairman of the committee; appointed by the Commissioners' Court, Judge Mike Moncrief; S.J. Stovall, former mayor of Arlington, later replaced by O.L. Watson; from Fort Worth, Dick Anderson; Mayor Bob Bolen; Councilman Bert Williams; Councilman Dick Newkirk, replaced upon his death by Councilman Estil Vance; from the Tarrant County Convention Center Advisory Board, appointed by the County Commissioners, chairman Billy Farrar and former chairman John McMillan; from the Fort Worth Chamber of Commerce, Jodie Grant and John Stephenson; and from the Convention and Visitors Special Fund, chairman Curtis Frazier and Don Henderson.

After this base committee, there was an additional staff committee comprised of various members from the municipalities: Jack Benson, County Auditor; Bob Hershert, City Manager of Fort Worth, later replaced by Doug Harmon; Mark Jeanette, Executive Director of the Convention and Visitors Bureau; Don Magness, of Will Rogers Memorial Complex; Clete McAlister, Director of Tarrant County Convention Center; and Bill Shelton, President of the Fort Worth Chamber of Commerce. After reviewing the problems, the lease agreement before this court was proposed.

The lease provided that the City would assume, on behalf of the County, all operational responsibility of the TCCC, for a period of thirty years, including $2,000,000 in improvements to be performed within the next two years. The lease agreement also provided that the City would use the TCCC, its parking facilities and personal property, solely for public purposes. The County would remain responsible for the remaining principal balance of $8,250,000 existing bond indebtedness.

THE TRIAL

Both parties waived a jury trial; the court found for the plaintiff. The trial court issued the following findings of fact and conclusions of law:

FINDINGS OF FACT

1. Ken Groves is an adult citizen who resides at 706 Vail Drive, Arlington, Texas and is a taxpayer of Tarrant County, Texas.

2. Defendant Tarrant County, Texas is a duly-created political subdivision of the State of Texas.

3. Defendant Tarrant County Commissioners Court, by virtue of the statutes of the State of Texas, is given and charged with the responsibility for care, control, and management of the affairs of Tarrant County, Texas.

4. Defendant City of Fort Worth, Texas is a duly-incorporated municipality situated in Tarrant County, Texas.

5. Exhibit "A" attached to Plaintiff's Fifth Amended Petition (and all previous petitions), was stipulated by all parties to be a true and correct copy of the Minutes of the Commissioners Court meeting of August 25, 1986, and a true and correct copy of the "Convention Center Lease Agreement" attached to said Minutes (hereinafter the "Agreement").

6. The bulletin board in the basement of the Tarrant County Courthouse and the fifth floor of the Tarrant County Administration Building were not places readily accessible to the general public at all times on the dates August 21, August 22, August 23, August 24, and August 25, 1986.

7. The public notice of the agenda for the Commissioners' Court meeting of Monday August 25, 1986 was not posted in a place readily accessible to the general public at all times for at least 72 hours preceding the scheduled time of the meeting.

8. Neither Defendant Tarrant County nor Defendant City of Fort Worth obtained an appraisal of either the fair market value of the Convention Center property, or of any property interest therein, or an appraisal of the value of any interest, including a leasehold interest in said property, prior to entering the Agreement on or about August 25, 1986.

9. The rental amount in the Agreement was not an "adequate rental" for the use of that property.

10. The remaining feasible economic life of the Convention Center is 30 years.

11. This Court finds that the Commissioners Court breached its fiduciary duty by entering into the Agreement.

12. The Court hereby finds that the County Commissioners Court, in entering into the Agreement has not complied with (1) the bond requirements under its order of June 17, 1968, and (2) the covenants of the revenue bonds which were to be paid by revenues from the parking facility.

13. This Court further finds that unless a permanent injunction is entered irreparable harm will occur.

14. The Court hereby finds that Plaintiff was obliged to obtain legal services from the law firm of Hill, Heard, Oneal [sic], Gilstrap & Goetz in this cause and the Court further finds that the fees charged by said firm were and are reasonable fees in Tarrant County, Texas, and the Court further finds that the hours spent and the work done by the firm were necessary for the preparation of this case. The Court further finds that reasonable and necessary attorneys' fees are in the amount of $40,000 through the trial of this cause, an additional $10,000 in the event this cause is appealed to the Texas Court of Appeals; an additional $5,000 in the event that writ of error is sought to the Supreme Court of Texas and an additional $5,000 in the event writ of error to the Supreme Court of Texas is granted.

CONCLUSIONS OF LAW

1. This Court has subject matter jurisdiction over this action and has jurisdiction to enter a declaratory judgment regarding whether the Commissioners Court was without authority to enter into the purported lease agreement in question and has jurisdiction to order injunctive relief.

2. Plaintiff Ken Groves has standing to bring this suit.

3. The principle of sovereign immunity is not applicable to this suit.

4. The action of the Commissioners Court on August 25, 1986, by which the Commissioners Court entered into the Agreement with the City of Fort Worth, is null and void, as a violation of: Article 6252-17 Tex.Rev.Civ.Stat.Ann. (Vernon's Supp.1987); Article 5421c-12 Tex.Rev.Civ.Stat.Ann. (Vernon's Supp.1987); Article 1269j-4.2 Tex.Rev.Civ.Stat.Ann. (Vernon's Supp.1987); Article 2372d-3 Tex.Rev.Civ.Stat.Ann. (Vernon's Supp.1987); Article 3, Section 52 of the Texas Constitution; and Article 11, Sections 3 & 7 of the Texas Constitution.

5. The lease for 30 years of the Convention Center and/or the personalty within the Convention Center is, in fact, a sale of said property.

6. The lease of the Convention Center and the personalty therein for $30.00 ($1.00 per year for 30 years) is a gift to the City of Fort Worth.

7. The County's continuing payments on the bonded indebtedness are a "lending of its credit" to the City.

8. The Commissioners Court, who holds the Convention Center (and all county-owned property) in trust for the residents of Tarrant County owes a fiduciary duty to manage, control and dispose of said Convention Center in a manner in keeping with that trust.

9. The actions of the County Commissioners Court in entering into the Agreement constitute an arbitrary and capricious...