State v. City of Galveston

• Decision Date: 10 September 2004
• Docket Number: No. 01-03-00557-CV.,01-03-00557-CV.
• Citation: 175 S.W.3d 1
• Parties: The STATE of Texas, Appellant, v. The CITY OF GALVESTON, Appellee.
• Court: Texas Supreme Court

Page 1

175 S.W.3d 1

The STATE of Texas, Appellant, v. The CITY OF GALVESTON, Appellee.

No. 01-03-00557-CV.

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

September 10, 2004.

COPYRIGHT MATERIAL OMITTED

Greg Abbott, Rance L. Craft, Assistant Solicitor General, Austin, TX, for Appellant.

Ramon G. Viada, Abrams, Scott & Bickley, L.L.P., Houston, TX, for Appellee.

Panel consists of Justices TAFT, KEYES, and BLAND.

OPINION

TIM TAFT, Justice.

Appellant, the State of Texas, appeals from a final order granting the plea to the jurisdiction of appellee, the City of Galveston ("the City"), and dismissing the cause. We decide whether a municipality enjoys governmental immunity from the State's lawsuit for negligence and actual damages. Answering the question in the negative, we reverse the order and remand the cause.

Standard of Review

In deciding a plea to the jurisdiction, a trial court considers the plaintiff's pleadings and any evidence pertinent to the jurisdictional inquiry. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554-55 (Tex.2000); see also Tex. Natural Res. Conservation Comm'n v. White, 46 S.W.3d 864, 867-68 (Tex.2001). We review de novo a trial court's ruling on a jurisdictional plea, construing the pleadings in the plaintiff's favor and looking to the pleader's intent. See Tex. Natural Res. Conservation Com'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex.2002); Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993); Junemann v. Harris County, 84 S.W.3d 689, 693 (Tex.App.-Houston [1st Dist.] 2002, pet. denied).

Background

The parties submitted no evidence; thus, our facts come from the State's petition, viewed in the appropriate light. See Tex. Ass'n of Bus., 852 S.W.2d at 446. The City and Galveston County asked the Texas Department of Transportation ("TxDOT") to build a roadway in Galveston County. As part of the agreement, the City "provided for the adjustment of all utilities, including a municipal water line which ran underneath a ramp approach and bridge deck of the roadway." The finished roadway was later designated as part of the State highway system. The City's waterline underlying the highway ruptured, causing erosion that threatened to collapse the highway and its bridge structures. The State spent its funds to repair the damage.

The State, on behalf of TxDOT, sued the City for negligence in the installation, maintenance, and upkeep of the water line. The State sought actual damages of $180,872.53, pre-judgment interest, attorney's fees, and costs. The City asserted governmental immunity from suit and filed a jurisdictional plea.¹ Specifically, the City argued that it enjoyed governmental immunity from suit and that the State had not pleaded a cause of action for which the Texas Tort Claims Act² ("TTCA") waived that immunity. The State responded on the ground that the City did not enjoy governmental immunity from the State's claims against it because the City's immunity derives wholly from that of the State. After a non-evidentiary hearing, the trial court granted the City's jurisdictional plea and dismissed the cause.

The City Does Not Enjoy Governmental Immunity from the State's Suit Asserting Negligence Claims for Actual Damages

Neither party disputes that the City performed a governmental function in committing the acts alleged by the State to have been negligent. See TEX. CIV. PRAC. & REM.CODE ANN. § 101.0215(11), (32) (Vernon 1997 & Supp.2004-2005) (defining municipality's governmental functions as including "waterworks" and "water and sewer service"); see also City of Dallas v. Reata Constr. Corp., 83 S.W.3d 392, 396 (Tex.App.-Dallas 2002) (holding that section 101.0215(11) and (32) encompass the act of marking underground water delivery system), rev'd on other grounds, No. 02-1031, 2004 WL 726906, ___ S.W.3d ___ (Tex. Apr.2, 2004). A city's performance of a governmental function entitles it to immunity from suit brought by private parties for tort damages arising out of that function's performance, absent a waiver of that immunity from suit in, for example, the TTCA. See, e.g., TEX. CIV. PRAC. & REM.CODE ANN. §§ 101.021, 101.0215(a), 101.025 (Vernon 1997 & Supp. 2004-2005).

In its sole issue, the State maintains that the trial court erred in granting the City's jurisdictional plea because any immunity from suit that the City possesses, as a political subdivision of the State, is an extension of the State's own immunity from suit and does not shield the city against the claims of the State itself. As the State explains, the City's immunity from suit "does not arise from any inherent sovereignty of [its] own, but instead derives from [its] status as [a] political subdivisio[n] of the State"; accordingly, the City impermissibly asserts "the State's immunity against the State itself." From this premise, the State concludes that no waiver of immunity from suit from within the TTCA is required for the State to sue the City for the latter's negligence.

A. Municipalities Derive Their Immunity From That of the State, as Sovereign

We look to common-law principles to determine whether the City enjoys governmental immunity from suit in this case. See Tex. A & M Univ.-Kingsville v. Lawson, 87 S.W.3d 518, 520 (Tex.2002) ("In Texas, the bar of sovereign immunity is a creature of the common law and not of any legislative enactment.").

Municipalities are political subdivisions of the State. See Lake Charles Harbor & Terminal Dist. v. Bd. of Trs. of Galveston Wharves, 62 S.W.3d 237, 246 (Tex.App.-Houston [14th Dist.] 2001, pet. denied); cf. TEX. CIV. PRAC. & REM.CODE ANN. § 101.001(3)(B) (Vernon Supp.2004-2005) ("`Governmental unit' means: . . . a political subdivision of this state, including any city. . . ."). Since 1884, municipalities have enjoyed immunity when performing governmental functions, but not when performing proprietary functions. See, e.g., City of Galveston v. Posnainsky, 62 Tex. 118, 132-33 (1884) (first distinguishing between municipality's governmental and proprietary functions for purposes of immunity from tort claims). In reaching this holding, the Posnainsky court reasoned that

in so far as municipal corporations . . . exercise powers conferred on them for purposes essentially public — purposes pertaining to the administration of general laws made to enforce the general policy of the state — they should be deemed agencies of the state, and not subject to be sued for any act or omission occurring while in the exercise of such power, unless, by statute, the action be given; that, in reference to such matters, they should stand as does sovereignty, whose agents they are, subject to be sued only when the state, by statute, declares they may be.

Id. at 127 (emphasis added). The supreme court's reasoning shows that municipalities enjoy immunity from suit for governmental activity, not due to any inherent sovereignty, but, rather, because the State cloaks them with the State's sovereign immunity from suit while they carry out the State's public purposes. See id. at 126-27. Thus, any immunity from suit that a municipality enjoys derives solely from the State's immunity — the former receives immunity from suit only when carrying out governmental activities implicitly delegated to it to carry out in the latter's stead. See id. at 128; cf. TEX. CIV. PRAC. & REM.CODE ANN. § 101.0215(a) (defining "governmental functions" as "those functions that are enjoined on a municipality by law and are given it by the state as part of the state's sovereignty, to be exercised by the municipality in the interest of the general public. . . ."). Texas courts have repeatedly noted or applied variations of the "derived immunity" reasoning that the Posnainsky court first recognized.³

Our sister court in Austin, based on a derived immunity reasoning, recently resolved an issue similar to the one before us in favor of the State. See Tex. Workers' Comp. Com'n v. City of Eagle Pass/Tex. Mun. League Workers' Comp. Joint Ins. Fund, 14 S.W.3d 801, 806 (Tex.App.-Austin 2000, pet. denied). In Eagle Pass, the Texas Workers' Compensation Commission ("TWCC"), a statewide agency,⁴ assessed administrative penalties against the city and its transportation authority ("Capital Metro") for their having made late benefits payments in violation of the Labor Code. See id. at 803. The city and Capital Metro were undisputedly "political subdivisions." See id. at 802-03, 805-06. The city and Capital Metro admitted violations, but claimed immunity from suit for administrative penalties under the sovereign-immunity doctrine. See id. at 803. The Austin Court of Appeals rejected the assertion, holding instead that a defense of immunity from suit was "inapplicable" to the State's enforcement action:

[M]unicipalities 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." A municipality's sovereignty is dependent upon that of the State. . . . Because political subdivisions of the State do not possess such independent sovereignty, they have no immunity as against the State.

Under the common law doctrine of immunity, municipalities and other political subdivisions of the State possess limited immunity from actions brought by private third parties. This immunity results from agency principles and the fact that municipalities and political subdivisions are agents of the State. A political subdivision's immunity is a privilege afforded it based on its existence as a subdivision of the State, and "[a] municipality, as a political subdivision of the state, is not liable for the acts or conduct of its officers or employees. . . ." Thus, a political subdivision's derivative immunity acts as a shield against actions brought by private parties but not as a shield against the State, from which the subdivision derives its immunity.

Id. at 803-04 (citations omitted;...