City of Texarkana v. City of New Boston

• Citation: 141 S.W.3d 778
• Decision Date: 23 July 2004
• Docket Number: No. 06-04-00023-CV.,06-04-00023-CV.
• Parties: CITY OF TEXARKANA, Texas d/b/a Texarkana Water Utilities, Appellants, v. CITIES OF NEW BOSTON, Hooks, DeKalb, Wake Village, Maud, Avery, and Annona, Texas, Appellees.
• Court: Texas Court of Appeals

141 S.W.3d 778

CITY OF TEXARKANA, Texas d/b/a Texarkana Water Utilities, Appellants, v. CITIES OF NEW BOSTON, Hooks, DeKalb, Wake Village, Maud, Avery, and Annona, Texas, Appellees.

No. 06-04-00023-CV.

Court of Appeals of Texas, Texarkana.

Submitted July 1, 2004.

Decided July 23, 2004.

Appeal from the 102nd Judicial District Court, Bowie County, Jimmy L. White, J Charles C. Frederiksen, Oscar Rey Rodriguez, Fulbright & Jaworski, LLP, Dallas, for appellants.

Christopher V. Popov, David J. Tuckfield, David P. Blanke, Vinson & Elkins, LLP, Austin, Paul Miller, Miller, James, Miller & Hornsby, LLP, Texarkana, for appellees.

Before MORRISS, C.J., ROSS and CARTER, JJ.

OPINION

Opinion by Chief Justice MORRISS.

Seven cities¹ to which the City of Texarkana, Texas, d/b/a Texarkana Water Utilities, has been supplying water for decades sued Texarkana in both contract and tort, asserting various causes of action arising from that relationship. Texarkana asserted below that governmental immunity completely bars the suit, but the trial court rejected its assertion. Texarkana now asks this Court to uphold its claim of governmental immunity and dismiss the action entirely. Although we agree with Texarkana that governmental immunity bars the causes of action sounding in tort, we conclude it does not bar those sounding in contract. Accordingly, we affirm as to the contract claims, leaving those pending for further action in the trial court, and reverse as to the tort claims, dismissing them.

Governmental Immunity, Generally

It is well established in Texas that sovereign or governmental immunity² protects the State, its agencies, and its officials from lawsuits for damages, absent the Legislature's consent through statute or legislative resolution. Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 853-54 (Tex.2002); Gen. Servs. Comm'n v. Little-Tex Insulation Co., 39 S.W.3d 591, 594 (Tex.2001); Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 405 (Tex.1997). The courts have uniformly held that "it is the Legislature's sole province to waive or abrogate sovereign immunity" and that any waiver must be expressed clearly and unambiguously. IT-Davy, 74 S.W.3d at 853-54 (quoting Fed. Sign, 951 S.W.2d at 409); see TEX. GOV'T CODE ANN. § 311.034 (Vernon Supp.2004) (stating that "a statute shall not be construed as a waiver of sovereign immunity unless the waiver is effected by clear and unambiguous language"); Univ. of Tex. Med. Branch v. York, 871 S.W.2d 175, 177 (Tex.1994). Because such immunity defeats a trial court's subject matter jurisdiction, a plea to the jurisdiction asserting immunity requires de novo review. IT-Davy, 74 S.W.3d at 855 (citing Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.1999); Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998)).

Immunity Applies Among Cities

Before reaching the question of waiver, we examine the Seven Cities' contention that Texarkana cannot assert governmental immunity when sued by other state governmental entities. Texarkana and the Seven Cities are political subdivisions, or "governmental units," of the State as defined by the Texas Tort Claims Act. See TEX. CIV. PRAC. & REM. CODE ANN. § 101.001(3)(B) (Vernon Supp.2004). As such, they enjoy governmental immunity to the extent it has not been abrogated by the Legislature. San Antonio Indep. Sch. Dist. v. McKinney, 936 S.W.2d 279, 283 (Tex.1996) (citing City of Galveston v. Posnainsky, 62 Tex. 118 (1884)). Recognizing that the parties in this case are all political subdivisions of the same sovereign, however, the Seven Cities argue that Texarkana cannot claim immunity from their suit, because immunity is designed to protect against actions brought by private parties, not against actions brought by other subdivisions of the State.

The Seven Cities cite two cases to support their position that Texarkana should not be permitted to assert governmental immunity to bar their claims, Texas Workers' Compensation Commission v. City of Eagle Pass, 14 S.W.3d 801 (Tex.App.—Austin 2000, pet. denied), and City of Canyon v. Fehr, 121 S.W.3d 899 (Tex.App.—Amarillo 2003, no pet.). In the former, the Third District Court of Appeals explained that "municipalities are created as political subdivisions of the State and `represent no sovereignty distinct from the state and possess only such powers and privileges as have been expressly or impliedly conferred upon them.'" City of Eagle Pass, 14 S.W.3d at 803 (quoting Payne v. Massey, 145 Tex. 237, 196 S.W.2d 493, 495 (1946)). The court reasoned that because "[a] political subdivision's immunity is a privilege afforded it based on its existence as a subdivision of the State," its "derivative immunity acts as a shield against actions brought by private parties but not as a shield against the State, from which it derives its immunity." Id. at 804. In the latter, the Seventh District Court of Appeals similarly stated that because "sovereign immunity exists as a means of protecting the independent sovereignty of the governmental unit[,] ... it operates to bar suits initiated by private third parties, not by entities in relation to which the governmental unit has no independent sovereignty." Fehr, 121 S.W.3d at 902.

Despite the apparent clarity of these positions, these two holdings are narrow and are easily distinguished from the case at bar. The court in City of Eagle Pass summarized its reasoning by agreeing that, "because municipalities and other political subdivisions of the State exist under the authority of the State and are subject to the State's regulatory authority, such entities do not enjoy sovereign immunity from state regulatory authority." City of Eagle Pass, 14 S.W.3d at 803 (emphasis added). While Texarkana's and the Seven Cities' authority derives from the State, neither party can exercise regulatory authority over the other. They are, instead, considered coequal under the law, neither party superior to the other. They share a common origin, but are wholly independent of each other and, unlike a municipality attempting to exert immunity against the sovereign from which its rights and privileges were originally obtained, immunity for these cities remains as viable a defense as when involved in a dispute by any other completely independent party.

The Seven Cities' reliance on Fehr does not alter this analysis. There, two residents of the City of Canyon sued the city for injunctive relief, seeking a decree ordering the city to abide by various provisions of its local charter and to submit a rezoning issue to a referendum election. Fehr, 121 S.W.3d at 902. Canyon argued the lawsuit was barred by governmental immunity, but the court, in light of the plaintiffs' claims, determined that "the citizenry [had] become the legislative branch of the governmental unit involved" and concluded that "the doctrine of sovereign immunity cannot be used by a municipality against itself." Id. This situation is not at all analogous to the claims against Texarkana a municipality entirely independent of the Seven Cities. We note also that courts generally apply sovereign immunity analyses in disputes between state agencies. See, e.g., Tex. Dep't of Transp. v. City of Sunset Valley, 92 S.W.3d 540 (Tex. App.—Austin 2002, pet. granted) (noting that municipalities are themselves agencies of the State); City of Houston v. Northwood Mun. Util. Dist. No. 1, 73 S.W.3d 304 (Tex.App.—Houston [1st Dist.] 2001, pet. denied); Tex. Dep't of Transp. v. City of Floresville Elec. Power & Light Sys., 53 S.W.3d 447 (Tex.App.—San Antonio 2001, no pet.). We, therefore, conclude sovereign immunity principles are to be applied horizontally between governmental entities. That is, political subdivisions of government cannot assert immunity against the sovereign from which its immunity is derived, but can assert immunity against other governmental entities deriving their rights and privileges from the same source.

Immunity Bars These Tort Claims

Having determined that Texarkana is entitled to invoke any viable governmental immunity defense against the Seven Cities' claims, we now consider whether immunity applies given the nature of the operations underlying this dispute. Texarkana argues its role in this dispute is clearly governmental; while the Seven Cities contend their injuries stem, not from Texarkana's governmental functions, but from its proprietary functions, potentially exposing Texarkana to unlimited liability. See City of Tyler v. Likes, 962 S.W.2d 489, 501 (Tex.1997) (explaining that the Texas Tort Claims Act is applicable to a municipality only in connection with its governmental functions).

While the doctrine of governmental immunity protects municipalities from being sued in tort for matters arising from the performance of their governmental functions (except as authorized by the Texas Tort Claims Act), no such protection exists for municipalities performing their proprietary functions. City of Corpus Christi v. Absolute Indus., 120 S.W.3d 1, 3 (Tex.App.—Corpus Christi 2001, pet. denied); see TEX. CIV. PRAC. & REM. CODE ANN. §§ 101.0215(a), (b), § 101.023(c) (Vernon Supp.2004), § 101.025(a) (Vernon 1997). "Accordingly, when a municipality commits a tort while engaged in a proprietary function[], it is liable to the same extent as a private entity or individual." Absolute Indus., 120 S.W.3d at 3. The question on appeal, therefore, is whether Texarkana's obligations under its agreement to provide water to the Seven Cities are considered governmental or proprietary.

Although waterworks and a number of other municipal functions have traditionally been considered proprietary under the common law, Section 101.0215 of the Texas Tort Claims Act reclassified them as governmental. See City of Odessa v. Bell, 787 S.W.2d 525, 527 (Tex.App.—El Paso 1990, no writ); George C. Kraehe, "There's Something About Cities": Understanding Proprietary Functions of Texas Municipalities and Governmental...