Killam Ranch Props., Ltd. v. Webb Cnty.

• Decision Date: 11 April 2012
• Docket Number: No. 04–10–00324–CV.,04–10–00324–CV.
• Parties: KILLAM RANCH PROPERTIES, LTD., Appellant v. WEBB COUNTY, Texas, Appellee.
• Court: Texas Court of Appeals

376 S.W.3d 146

KILLAM RANCH PROPERTIES, LTD., Appellant

v.WEBB COUNTY, Texas, Appellee.

No. 04–10–00324–CV.

Court of Appeals of Texas,

San Antonio.

April 11, 2012.

From the 341st Judicial District Court, Webb County, Texas, Trial Court No. 2007–CVQ–001680–D3, Michael P. Peden, Judge Presiding. ¹

Kimberly S. Keller, The Keller Law Firm, Boerne, TX, for appellant.

James P. Allison, Allison, Bass & Associates, L.L.P., Austin, TX, Byron C. Keeling, Ruth B. Downes, Keeling & Downes, P.C., Houston, TX, Alison White Haynes, Trevino Valls Haynes, Laredo, TX, for Appellee.

Sitting en banc: CATHERINE STONE, Chief Justice, KAREN A. ANGELINI, Justice, SANDEE BRYAN MARION, Justice, PHYLIS J. SPEEDLIN, Justice, REBECCA SIMMONS, Justice, STEVEN C. HILBIG, Justice, MARIALYN BARNARD, Justice.

OPINION

OPINION ON MOTION FOR EN BANC RECONSIDERATION.

Opinion by: STEVEN C. HILBIG, Justice.

Killam Ranch Properties Motion for En Banc Reconsideration is granted. We withdraw our May 11, 2011 opinion and judgment and issue this opinion and judgment in its place.

This appeal arises from Killam Ranch Properties, Ltd.'s (“Killam”) claim that Webb County violated the Texas Local Government Code and the Texas Open Meetings Act when it sold county-owned acreage and easements to Khaledi Properties, Ltd. (“Khaledi”). Killam filed suit against Webb County seeking a declaration the sale was void because of the statutory violations. Killam also filed a lis pendens. Both parties filed motions for summary judgment. The trial court granted Webb County's motions and denied Killam's motions. Killam appeals the denial of its motions and the granting of Webb County's motions. We affirm in part and reverse and remand in part.

BACKGROUND

Factual background

Webb County owns a 294.24–acre parcel of property commonly known as the Webb County Detention Center, which it acquired from the United States in 1980. The federal government also conveyed easements over land owned by Killam. The easements provide access to the property.

The record reflects that Webb County Commissioners Court passed a resolution to solicit bids to sell the property on November 14, 2005. The original minutes from the meeting state as follows:

Item No. 9 Discussion and possible action to direct the Webb County Purchasing Agent to solicit requests for proposals for the possible sale of the Webb County Detention Center.

Judge Bruni motioned to approve item as submitted. Cmr. Cortez–Bruner seconded the motion.

Cmr. Gutierrez states that in previous meetings, the Court had set a minimum bid of $10 million and doesn't feed that it should change. She stated that the court was responsible to the taxpayers and stated that she did not see the need to sell the property anytime soon. She stated that it was hard to make a decision without seeing an appraisal on the property.

Judge Bruni motioned to approve item as submitted with a $10 million minimumbid. Cmr. Garza seconded the motion.

Motion carried 4–1 with Cmr. Gutierrez voting against.

Several years later and after the suit was filed, the commissioners issued an order that amended the original minutes. The order states “Item No. 9 inaccurately reflects that Judge Bruni motioned to approve item as submitted with $10 million minimum bid.” (CR1118). The amended minutes eliminated any reference to a minimum bid.

Eloy Ramirez, the Webb County purchasing agent, testified in his deposition regarding the sale of the property and the bidding process. He testified Webb County used the procedure identified in the “local government code” as its standard procedure for the sale of real estate. Ramirez described the sealed bid process in Webb County as “bids are submitted in sealed envelopes and they're opened and read to the public.” Although not ordered to do so by the Commissioners Court, Ramirez included in the public bid notice that the property was being sold pursuant to section 263.007 of the Texas Local Government Code.² Ramirez testified he determined on his own, based on his background and experience as purchasing agent for Webb County, to use section 263.007 to sell the property. The notices identified the property as 294.24 acres, and stated it was being sold through sealed bid procedure pursuant to section 263.007. The notices made no reference to any easements.

Three entities eventually submitted sealed bids—Khaledi, Killam, and Har Properties Ltd., an entity associated with Khaledi. Khaledi's bid was subject to conditions, including the sale of the county-owned easements over Killam's property. Ramirez recommended the commissioners accept Khaledi's bid. On January 9, 2006, the commissioners considered the bids and voted to accept Khaledi's bid. The commissioners met in executive session four times, between January 2006 and October 2006, to discuss the sale of the property to Khaledi.

Procedural background

Killam filed a declaratory judgment action against Webb County seeking a declaration the sale of the property was void because the County did not comply with the bidding requirements in section 263.007, or alternatively, the County failed to comply with section 272.001 of the Local Government Code. ³ Killam also asserted that by convening closed meetings to continue negotiations of the sale of the property after the County voted to accept Khaledi's bid, the County violated the Texas Open Meetings Act, and the resulting sale was void.

Killam filed a traditional motion for partial summary judgment on the ground the commissioners court authorized the sale of only the acreage and not the easements. This motion was denied. Killam filed a second traditional motion for summary judgment on its claim the sale was void because Webb County did not comply with sections 263.007 or 272.001 and it violated the Texas Open Meetings Act. This motion was also denied.

Webb County filed a traditional motion for summary judgment on the grounds that it substantially complied with section 263.007 or alternatively, met the requirements of section 272.001. Webb County also filed a no evidence motion for summary judgment, asserting Killam had provided no evidence the County violated the open meetings act and no evidence Webb County conducted closed meetings “to negotiate the Real Estate Sales Contract with Khaledi.” The trial court granted both Webb County's motions for summary judgment. Webb County filed a motion for attorneys fees, and Khaledi filed a motion to cancel the lis pendens. The trial court granted both motions at the hearing on the motions. The award of attorney's fees was included in the judgment; however, the order canceling the lis pendens was not signed by the trial court until after the court lost plenary power.

DISCUSSION

TEXAS LOCAL GOVERNMENT CODE

Killam's claims

Killam contends Webb County was required to sell the 294.24 acres pursuant to section 263.007 because the public notice stated the sale was pursuant to that statute. Killam claims Webb County did not comply with section 263.007 because:

1. Webb County failed to “adopt a procedure” for the sealed-bid sale as required by section 263.007;

2. the public notices of the sale were inadequate because neither the public notice nor the bid specifications disclosed that the sale encompassed the easements;

3. Webb County failed to obtain and consider an appraisal before the sale to ascertain the property's fair market value; and

4. Webb County did not determine a minimum bid amount based on the appraisal.

Alternatively, Killam argues Webb County failed to comply with section 272.001(c), which Killam contends requires county-owned easements be sold to abutting property owners.

Killam also claims Webb County accepted an improper bid because Khaledi's bid was not for the “total price for the 294.24 acres;” and Khaledi provided a conditional offer to pay $3,100,000.00 if the acreage was buildable, it was free of easements or restrictions, Webb County granted a warranty of use for single family dwelling or multiple family units, and Webb County separately conveyed the county-owned easement overlying Killam's abutting 24.36 acres. Additionally, Killam contends Khaledi's bid should have been rejected because it was less than the $10 million minimum bid requirement.

Application of section 263.007 of the Texas Local Government Code

Killam first contends that because Webb County's public notice and bid specifications stated the property would be sold pursuant to section 263.007 of the Texas Local Government Code, Webb County had to comply with that section and section 272.001 was not applicable.

The Texas Local Government Code authorizes counties to sell property through a closed bid procedure under either sections 263.007 or 272.001. SeeTex. Loc. Gov't Code Ann.. § 263.007 and § 272.001 (West Supp. 2010). Section 263.007(a) provides the Commissioners Court of a county may adopt a procedure by which the county may sell or lease any real property through a sealed-bid or sealed-proposal procedure. Unlike section 263.007(a), section 272.001(a) does not include any language requiring local governments to adopt a procedure for the sale of real property; instead it requires only that the local governments comply with the enumerated requirements in section 272.001.

When interpreting statutes, our primary concern is the Legislature's intent as expressed by the language of the statute. Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437 (Tex.2009); State v. Shumake, 199 S.W.3d 279, 284 (Tex.2006). We construe the statute's words according to their plain and common meaning unless a contrary intention is apparent from the context or unless such a construction leads to nonsensical or absurd results. FKM P'ship, Ltd. v. Bd. of Regents of Univ. of Houston Sys., 255 S.W.3d 619, 633 (Tex.2008); see also Fleming Foods of Tex., Inc. v. Rylander, 6 S.W.3d 278, 284 (Tex.1999). When we interpret a code enacted by the legislature, we read words and phrases in context and construe them according to the rules of grammar...