Clear Lake City Water Authority v. Winograd

• Decision Date: 13 June 1985
• Docket Number: No. 01-84-0810-CV,01-84-0810-CV
• Citation: 695 S.W.2d 632
• Parties: CLEAR LAKE CITY WATER AUTHORITY, Appellant, v. Dr. Eugene WINOGRAD, Trustee, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 632

695 S.W.2d 632

CLEAR LAKE CITY WATER AUTHORITY, Appellant, v. Dr. Eugene WINOGRAD, Trustee, Appellee.

No. 01-84-0810-CV.

Court of Appeals of Texas Houston (1st Dist.).

June 13, 1985.

Rehearing Denied July 25, 1985.

Jeffrey W. Hurt and Therese Ruffing, Leonard, Koehn & Hurt, Bellaire, for appellant.

J. Douglas Sutter, Charles W. Kelly and James E. Ross, Ross, Griggs & Harrison, Houston, for appellee.

Before EVANS, C.J., and COHEN and DUNN, JJ.

OPINION

EVANS, Chief Justice.

This is an appeal from a permanent injunction, mandating that Clear Lake City Water Authority furnish water and sewage service to certain land within its jurisdiction owned by the appellee, Dr. Eugene Winograd, trustee. We affirm.

This case was tried before a jury, and two special issues were submitted:

SPECIAL ISSUE ONE

Equal protection of the laws requires that the government base any differences in treatment of applicants on rational criteria that are reasonably related to a legitimate function of that particular governmental unit.

This would prohibit the application of otherwise proper standards if they are not customarily applied in the same fashion to all similar applicants.

Although mere mistakes or errors of judgment are not a denial of equal protection of the laws, if you find (1) that the acts of the government are motivated by ill will or (2) that there is a pervasive pattern of obstruction, misrepresentation, and hostility toward a party, then you may find a denial of equal protection.

Do you find that Clear Lake failed to afford Winograd equal protection of the laws?

SPECIAL ISSUE TWO

Do you find that the differential treatment, if any, resulted in the denial of Winograd's application?

The jury answered the first issue affirmatively and the second issue negatively. After reviewing the record, we conclude that the trial court's judgment was based not only upon the jury's response to the first special issue, but upon additional grounds, which are also presented for our review. A procedural history of the case will help to explain the dispositive issues of the appeal.

Dr. Winograd initially filed these proceedings as a bill of discovery action. In his original petition, filed on August 20, 1982, he alleged that the Water Authority had previously refused to honor its commitment to provide available water and sewage service for the planned development of his acreage in the Clear Lake City area. He stated that he contemplated submitting an application for one phase of this development in the near future, but was reluctant to do so after the Water Authority's previous discriminatory action and because the cost of preparing the application would exceed $130,000. In his petition, Dr. Winograd asked that the Water Authority be required to document specifically its precise standards and policies for granting water and sewage service to applicants and also that it be required to answer written interrogatories and to submit to oral deposition. In September 1982, the Water Authority filed a special exception and plea in abatement to the original petition, along with its original answer. In October 1982, Dr. Winograd filed one written interrogatory with various subparagraphs, and also a notice to take the deposition of a Water Authority representative, to which request the Water Authority objected.

Upon motion of the Water Authority, the trial court directed that the oral deposition not be taken at that time, but it ordered the Water Authority to answer Dr. Winograd's written interrogatory prior to November 1, 1982. The Water Authority responded to this interrogatory by submitting certain pages from its development policy manual, bearing numbers DEV-10 through DEV-50, which supposedly set forth the criteria it used to determine whether sewer services would be granted to a multi-family residential development or to a commercial office building. The Water Authority, however, refused to answer any of the interrogatory's subparagraphs, objecting that these additional questions violated the terms of the protective order that authorized Dr. Winograd to pose a single interrogatory. The court overruled this objection and ordered the Water Authority to fully answer the interrogatory.

In January 1983, the Water Authority filed a second answer to Dr. Winograd's interrogatory. The first two subparts of the interrogatory read as follows:

1. Please state with precision the criteria currently used by the Clear Lake City Water Authority in determining whether sewer services will be granted to a multifamily residential development and/or a commercial office building.

(a) If any of the criteria set forth above are memoralized [sic] in writing, please attach true and correct copies thereof to your answers to these interrogatories.

(b) If any of the criteria set forth above are not memoralized [sic] in writing, please describe said criteria in detail. Be as precise as you ever intend to be.

The Water Authority responded to these two subparts merely by referring to the documents attached to its original response, and by further stating that all criteria had been memorialized in writing.

The third subpart of the interrogatory read:

(c) Are there any present plans to amend, modify, or otherwise revise the criteria set forth above within the next three months? If so, please describe the proposed amendment, modification or revision in full and complete detail.

In answer to this subpart, the Water Authority stated that although the board of directors had generally discussed amending its criteria, there was, at that time, no specific proposed amendment, modification, or revision under consideration. It also represented that Dr. Winograd could have access to the tapes of any relevant meetings.

The fourth subpart asked:

(d) If a commercial developer applying for sewage services for the types of projects described above meets the criteria specified above, is there any basis upon which his application could be denied? If so, describe the basis or bases.

In response to this subpart, the Water Authority asserted that the bases for denying an application for service included the "full range" of its legislative discretion, as related to the merits of each application. It asserted, by way of example, that an application that presented special floodwater or sewage problems might be denied.

The fifth subpart inquired:

(e) Has any developer submitted an application for sewage services which met the criteria set forth above, and which such [sic] application was rejected, within the last twelve (12) months?

(1) If so, please identify the developer and the project.

(2) State the reason or reasons that the application was denied.

The Water Authority responded negatively to this subpart and indicated that it was therefore unnecessary to answer questions (e)(1) and (e)(2).

Finally, the interrogatory asked:

(f) Is there in effect at the present time, or is there contemplated within the next twelve months, a moratorium on the granting of sewage services to property within the jurisdiction of the Clear Lake City Water Authority? If so, please state the content of the moratorium and its effective date?

In response to this subpart, the Water Authority referred to documents attached to its answer.

In September 1983, Dr. Winograd moved for sanctions, alleging that he had relied on the Water Authority's answer to his interrogatory and that he had constructed a proposal for development, seeking sewer services, and had expended funds for planning and development at a total cost of $130,000. He asserted that when he presented his proposal to the Water Authority, his application was denied on the basis of noncompliance with two developmental policies that the Water Authority had never included in its answers to his interrogatory. He prayed for his costs, for reasonable attorney's fees, and for general relief.

In November 1983, the trial court signed two orders that granted Dr. Winograd's motions for sanctions, finding that the Water Authority had filed a misleading original answer to the interrogatory and that it had failed to amend its answer at the time it knew the answer to be false. As a sanction, the court ordered the Water Authority to pay $7,500 to Dr. Winograd and directed Dr. Winograd to pursue any further inquiry he might desire.

In January 1984, Dr. Winograd filed his first amended original petition, seeking a mandatory injunction ordering the Water Authority to provide water and sewage service to his tract of land. The petition alleged that he had prepared an application that met each and every standard set forth in the Water Authority's response to his written interrogatory; that he had spent in excess of $100,000 in preparing his application; and that the Water Authority had refused to approve his application, solely on the basis of two development policies it had not disclosed in its answers to his interrogatory, to-wit:

(1) an alleged policy based upon a requirement of the Environmental Protection Agency that sewage service not be furnished to buildings within the 100-year floodplain, and

(2) an alleged policy precluding construction of any multi-family housing that would violate a designated ratio of single-family housing to multi-family housing in the Clear Lake City area.

Dr. Winograd asserted that the Water Authority's refusal to grant his application for service was arbitrary, capricious, and irrational, entitling him to injunctive relief.

In January 1984, the Water Authority finally supplemented its answers to the written interrogatory, attaching another page from its policy manual, DEV-60 as revised, which set forth the two additional criteria for allocation of available sewage treatment capacity. The date of issuance of DEV-60 is shown as February 17, 1983.

The court called the case for trial in July 1984, at which time it submitted two special issues to the jury. The court instructed the jury that a party had a continuing legal...