City of Odessa v. Bell, 08-89-00224-CV

• Decision Date: 21 March 1990
• Docket Number: No. 08-89-00224-CV,08-89-00224-CV
• Citation: 787 S.W.2d 525
• Parties: The CITY OF ODESSA, Texas, Appellant, v. Lee BELL and Debbie Bell, Appellees.
• Court: Texas Court of Appeals

Page 525

787 S.W.2d 525

The CITY OF ODESSA, Texas, Appellant, v. Lee BELL and Debbie Bell, Appellees.

No. 08-89-00224-CV.

Court of Appeals of Texas El Paso.

March 21, 1990.

Rehearing Denied as Moot in View of Withdrawal of Petitions

April 18, 1990.

Stuart Whitlow, Shannon H. Ratliff, McGinnis, Lochridge & Kilgore, Austin, for appellant.

Paul M. Bohannon, Midland, for appellees.

Before FULLER, WOODARD and KOEHLER, JJ.

OPINION

KOEHLER, Justice.

In an inverse condemnation case brought under Article 1, sec. 17 of the Texas Constitution, the jury awarded actual ($103,000.00) and exemplary ($327,000.00) damages in favor of the Appellee property owners against the Appellant City of Odessa ("City"), such damages allegedly resulting from the flow of sewer water discharged by water treatment facilities operated by the City, down a draw to Appellees' property. From an adverse judgment on the verdict, the City brings this appeal. We affirm in part and reverse and render in part.

The City operates two water treatment plants, one since 1950 and the second since 1982, which discharge "treated" sewer water or effluent into the Monahans Draw, a natural drainage gully located in Ector and Midland Counties. Commencing in November 1980, effluent apparently combined with rainwater began reaching and flooding Appellees' property, located some fifteen and twenty miles downstream from the two treatment plants. In their fifth amended petition, Appellees alleged that from that time through December 1988, various portions of their acreage was flooded a total of nineteen times for periods varying from a few days to as much as 310 days, with the direct and proximate result that they were frequently unable to plant or harvest crops. The case was submitted to the jury on the theory, and the jury found, that the City by its acts in discharging excessive amounts of effluent, amounting to a nuisance or a trespass, had damaged Appellees' property for public use without adequate compensation. The jury also found that the damage to the land in question was "temporary," that Appellees first became aware of damage to their land in March 1981, and that the City's conduct was done with a malicious or evil intent and was directly imputed to its government.

In its first two points of error, the City contends that, as a matter of law, punitive damages cannot be awarded in an inverse condemnation action against a municipality acting in its governmental capacity, and furthermore, there was either no evidence or insufficient evidence to support the jury's verdict awarding punitive damages.

It is settled law that the operation and maintenance of a sanitary sewer system by a city is a governmental function. Callaway v. City of Odessa, 602 S.W.2d 330, 333 (Tex.Civ.App.--El Paso 1980, no writ). Prior to 1969, a city was not liable for its negligent acts in the performance of a governmental function. As a result of the enactment in that year of the Texas Tort Claims Act, Tex.Civ.Prac. & Rem.Code, sec. 101.001 et seq. (Vernon 1986), the immunity from liability for negligent performance of its governmental functions was removed, but it remained exempt from exemplary damages. Section 101.024. Liability for negligent acts or omissions in the performance of proprietary functions was not affected by the Tort Claims Act since it was expressly provided that the Act did "not apply to a proprietary function of a municipality." Tex.Civ.Prac. & Rem.Code, sec. 101.058 [formerly Tex.Rev.Civ.Stat.Ann. art. 6252-19, sec. 18(a) ].

In May 1987, the Supreme Court of Texas in City of Gladewater v. Pike, 727 S.W.2d 514 (Tex.1987), held that even in the performance of proprietary functions, unless the acts of a city are found by the fact finder to be intentional, willful, wanton or grossly negligent so as to "show maliciousness or evil intent by a policy-making official of the municipality, no exemplary damages can be awarded." 727 S.W.2d at 525. Shortly after that opinion was released, the Texas Legislature repealed Section 101.058, effective September 2, 1987. Texas Session Laws, Acts 1987, 70th Leg., 1st C.S., ch. 2, sec. 3.13. At the same time, the legislature added Section 101.0215(a), which designated a number of listed functions of a municipality as governmental, including not only such long held governmental functions as police and fire protection, and sanitary and storm sewers, but such traditional proprietary functions as the operations of cemeteries, waterworks and street construction and design. A very few functions were designated under Section 101.0215(b) as proprietary. We take this to mean that the Tort Claims Act now applies to all actions sounding in tort brought against a municipality. Under the present statutory and case law, we conclude that in negligence actions brought under the Tort Claims Act, a city is not liable for exemplary damages, regardless of whether the function was governmental or proprietary, by virtue of Section 101.024.

Appellees argue that Pike stands for the proposition that exemplary damages can be recovered from a municipality where the claim is not brought under the Tort Claims Act. We find no such broad principle expressed. It merely held that in a case of negligent performance of a proprietary function, which at that time was not covered by the Tort Claims Act, exemplary damages could be awarded under certain very egregious circumstances. As suggested above, with the repeal of Section 101.058, it is doubtful that the holding in Pike as it might apply to the possibility of exemplary damages in negligence cases is still valid.

As Appellees point out, this case is not a negligence action brought under the Tort Claims Act, but is rather a suit for damages under Article 1, sec. 17 of the Texas Constitution, resulting from a nuisance or trespass perpetrated by the City. Article 1, sec. 17 reads in applicable part as follows:

No person's property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made, unless by consent of such person; .... [Emphasis added.]

The term "adequate compensation" does not encompass exemplary damages since such damages are punitive in nature and have nothing to do with compensating a party for his losses. There is no statutory authority for exemplary damages in cases brought for damage to property under Article 1, sec. 17. Appellees have cited no Texas cases, and we have found none, in which exemplary damages have been allowed to stand against a city in a situation where private property was damaged or taken for public use. In Holt v. City of San Marcos, 288 S.W.2d 802, 809 (Tex.Civ.App.--Austin 1956, writ ref'd n.r.e.), the court held that Article 1, sec. 17 defined the right and fixed the exclusive remedy of adequate compensation. Appellees did cite two cases, San Antonio River Authority v. Garrett Brothers, 528 S.W.2d 266 (Tex.Civ.App.--San Antonio 1975, writ ref'd n.r.e.) and Ostrom v. City of San Antonio, 77 S.W. 829 (Tex.Civ.App.--San Antonio 1903, writ ref'd), which held out the possibility of exemplary damages in an exceptional case and one in which the governing body concurs in or ratifies the acts of the municipal officers. This is not an exceptional case and there was no evidence to support the jury findings of malicious conduct or evil intent by the City or that such conduct was imputed to the City government. Such findings would require evidence that the mayor or city council, through its water treatment officials, intended not just to release large amounts of effluent into the Monahans Draw but maliciously or evilly intended to damage Appellees' land. The fact that Robert Derrington, the director of the Odessa Utilities Administration, the department responsible for the operation of the water treatment plants, testified that he thought it was all right for effluent in a heavy rain to get out of the draw and onto private land, despite the fact that the permits from the Texas Water Commission and the Environmental Protection Agency denied the City the right to use private property without first obtaining an easement, showed no evil or malicious intent. Nor is such evil intent shown by the fact the City's environmental control manager, Debbie McReynolds, was unaware or unknowledgeable of the permit restrictions. Appellees contend that the City was aware that complaints regarding sewer water flooding had been made as early as 1977 through a letter addressed to the Texas Water Quality Board. When shown a copy of the letter, which was not admitted into evidence, McReynolds acknowledged only that there "evidently were complaints lodged that early." Appellees argue in effect that the evil or malicious intent of the City (Derrington and McReynolds) to damage their land by flooding it with effluent mixed with rainwater was imputed to the City, as found by the jury, since the mayor is the chief executive officer of the City and he did not testify at the trial. They further argue that since the mayor did not refute the testimony of another property owner, Louise Gay, whatever McReynolds told Gay in June 1986 about the permits giving the City (as Appellees characterize it) "the right to dump the sewer water" was uncontroverted, despite McReynolds' testimony that she merely told Gay that it was discharging into Monahans Draw under its permits. The record reflects that Gay actually testified that McReynolds told her that they were working on the problem but they were going to continue discharging water into the draw because they could not get anything done about it in the near future. Even under Pike, the burden would be on Appellees to prove that the evil and malicious intent was imputed to the mayor and city council. Under San Antonio River Authority, it would be necessary to show that the mayor and city council concurred in or ratified the malicious and evil acts of its departmental officials. There is some evidence that the mayor knew of...