Gates v. City of Dallas, No. C-3957

CourtSupreme Court of Texas
Writing for the CourtROBERTSON
Citation704 S.W.2d 737
PartiesCharles GATES, Petitioners, v. CITY OF DALLAS, Respondent.
Decision Date12 February 1986
Docket NumberNo. C-3957

Page 737

704 S.W.2d 737
Charles GATES, Petitioners,
v.
CITY OF DALLAS, Respondent.
No. C-3957.
Supreme Court of Texas.
Feb. 12, 1986.
Rehearing Denied March 19, 1986.

Page 738

Michael W. Stucker, Hercules & Lavery, G. Frank Brown, Dallas, for petitioners.

Paul K. Pearce, Jr., Office of the City Atty., of Dallas, Dallas, for respondent.

ROBERTSON, Justice.

This is an appeal from a denial of attorney's fees in a suit against the City of Dallas for failure to pay insurance benefits. The City of Dallas established a self-insurance plan for health benefits of its employees and their dependents which was administered by Republic National Life Insurance Company. Betty Gates, a dependent, suffers from multiple sclerosis, requiring a nurse to attend her. The nursing services were paid for under the City's insurance plan. Thereafter in 1982 the City took over administration of the self-insurance fund and denied further payment of benefits to Mrs. Gates. Gates then sued the City of Dallas for denial of insurance benefits. The trial court rendered partial summary judgment in favor of Gates for the unpaid accrued benefits. Thereafter, the parties stipulated that the City would pay future claims under the plan. Recovery of attorney's fees was the sole issue upon which the parties proceeded to trial. The trial court further found reasonable attorney's fees in the amount of $120,000 to be recoverable from the City of Dallas pursuant to Tex.Rev.Civ.Stat.Ann. art. 2226 (Vernon Supp.1985) 1 and Tex.Ins.Code Ann. art. 1.14-1(7) (Vernon 1981).

The court of appeals reversed the award of attorney's fees and affirmed the trial court judgment in all other respects. 684 S.W.2d 792. We reverse the judgment of the court of appeals and remand to that court for a determination of reasonableness of the amount of attorney's fees awarded by the trial court.

The City of Dallas is a home rule municipal corporation. As such it has broad powers of self-government. City of Corpus Christi v. Continental Bus Systems, Inc., 445 S.W.2d 12, 16 (Tex.Civ.App.--Austin 1969, writ ref'd n.r.e.). Municipal corporations exercise their broad powers through two different roles; proprietary and governmental. The governmental functions of a municipal corporation have been defined as those acts which are public in nature and performed by the municipality "as the agent of the State in furtherance of general law for the interest of the public at

Page 739

large." City of Crystal City v. Crystal City Country Club, 486 S.W.2d 887, 889 (Tex.Civ.App.--Beaumont 1972, writ ref'd n.r.e.). Proprietary functions are those functions performed by a city, in its discretion, primarily for the benefit of those within the corporate limits of the municipality. Id.

Unlike governmental functions, for which municipal corporations have traditionally been afforded some degree of governmental immunity, proprietary functions have subjected municipal corporations to the same duties and liabilities as those incurred by private persons and corporations. See Tarvey v. City of Houston, 602 S.W.2d 517 (Tex.1980) (City held liable for unlimited damages for tort committed while negligently performing proprietary function); see also Cone v. City of Lubbock, 431 S.W.2d 639 (Tex.Civ.App.--Amarillo 1968, writ ref'd n.r.e.) (City liable for damages for improper issuance of temporary injunction where litigation involved proprietary activity). Contracts made by municipal corporations in their proprietary capacity have been held to be governed by the same rules as contracts between individuals. Blythe v. City of Graham, 287 S.W.2d 527, 530 (Tex.Civ.App.--Fort Worth 1956, writ ref'd n.r.e.); Gardner v. City of Dallas, 81 F.2d 425 (5th Cir.), cert. denied 298 U.S. 668, 56 S.Ct. 834, 80 L.Ed. 1391 (1936).

When the City of Dallas entered into the insurance contract with Gates, it acted in its proprietary role and was "clothed with the same authority and subject to the same liabilities as a private citizen." Boiles v. City of Abilene, 276 S.W.2d 922, 925 (Tex.Civ.App.--Eastland 1955, writ ref'd). Therefore, the City of Dallas is subject to the provisions of article 2226, governing claims based upon a written contract, as would be a private citizen.

Findings of fact and conclusions of law were filed by the trial court which support the award of attorney's fees pursuant to article 2226. The court found that Gates had a valid claim based upon a written contract,...

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113 practice notes
  • DM Arbor Court, Ltd. v. The City of Hous., Civil Action H-18-1884
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • October 21, 2021
    ...“Municipal corporations exercise their broad powers through two different roles; proprietary and governmental.” Gates v. City of Dallas, 704 S.W.2d 737, 738 (Tex. 1986). As the Texas Supreme Court recently explained, “[t]he governmental/proprietary dichotomy recognizes that immunity protect......
  • State v. City of Galveston, No. 01-03-00557-CV.
    • United States
    • Supreme Court of Texas
    • September 10, 2004
    ...city is deemed agent of state for sovereign-immunity purposes when city exercises powers for public purpose); Gates v. City of Dallas, 704 S.W.2d 737, 738-39 (Tex.1986) ("The governmental functions of a municipal corporation have been defined as those acts which are public in nature and per......
  • Tooke v. City of Mexia, No. 03-0878.
    • United States
    • Supreme Court of Texas
    • June 30, 2006
    ...962 S.W.2d 489, 501 (Tex.1997); Dilley v. City of Houston, 148 Tex. 191, 222 S.W.2d 992, 993-994 (1949). 89. Cf. Gates v. City of Dallas, 704 S.W.2d 737, 738-739 (Tex.1986) (stating that "[c]ontracts made by municipal corporations in their proprietary capacity have been held to be governed ......
  • Bailey v. City of Austin, No. 03-97-00789-CV
    • United States
    • Court of Appeals of Texas
    • July 16, 1998
    ...the City of Austin, are traditionally afforded governmental immunity for performance of governmental functions. Gates v. City of Dallas, 704 S.W.2d 737, 738 (Tex.1986); see Dillard v. Austin Indep. Sch. Dist., 806 S.W.2d 589, 594 (Tex.App.--Austin 1991, writ denied) (governmental unit not s......
  • Request a trial to view additional results
112 cases
  • DM Arbor Court, Ltd. v. The City of Hous., Civil Action H-18-1884
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • October 21, 2021
    ...“Municipal corporations exercise their broad powers through two different roles; proprietary and governmental.” Gates v. City of Dallas, 704 S.W.2d 737, 738 (Tex. 1986). As the Texas Supreme Court recently explained, “[t]he governmental/proprietary dichotomy recognizes that immunity protect......
  • State v. City of Galveston, No. 01-03-00557-CV.
    • United States
    • Supreme Court of Texas
    • September 10, 2004
    ...city is deemed agent of state for sovereign-immunity purposes when city exercises powers for public purpose); Gates v. City of Dallas, 704 S.W.2d 737, 738-39 (Tex.1986) ("The governmental functions of a municipal corporation have been defined as those acts which are public in nature and per......
  • Tooke v. City of Mexia, No. 03-0878.
    • United States
    • Supreme Court of Texas
    • June 30, 2006
    ...962 S.W.2d 489, 501 (Tex.1997); Dilley v. City of Houston, 148 Tex. 191, 222 S.W.2d 992, 993-994 (1949). 89. Cf. Gates v. City of Dallas, 704 S.W.2d 737, 738-739 (Tex.1986) (stating that "[c]ontracts made by municipal corporations in their proprietary capacity have been held to be governed ......
  • Bailey v. City of Austin, No. 03-97-00789-CV
    • United States
    • Court of Appeals of Texas
    • July 16, 1998
    ...the City of Austin, are traditionally afforded governmental immunity for performance of governmental functions. Gates v. City of Dallas, 704 S.W.2d 737, 738 (Tex.1986); see Dillard v. Austin Indep. Sch. Dist., 806 S.W.2d 589, 594 (Tex.App.--Austin 1991, writ denied) (governmental unit not s......
  • Request a trial to view additional results

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