Taxpayers for Sensible Riorities v. City of Dallas

• Citation: 79 S.W.3d 670
• Decision Date: 06 June 2002
• Docket Number: No. 05-01-01579-CV.,05-01-01579-CV.
• Parties: TAXPAYERS FOR SENSIBLE PRIOR-ITIES, Mary Ellen Bluntzer, M.D., Campbell Read, Joe Wells, Syd Reagan, David Gray, D.J. Young, Betty Thompson, Nancy Bateman, Roy Williams, and James Lynch, Appellants, v. CITY OF DALLAS, Appellee.
• Court: Court of Appeals of Texas

79 S.W.3d 670

TAXPAYERS FOR SENSIBLE PRIOR-ITIES, Mary Ellen Bluntzer, M.D., Campbell Read, Joe Wells, Syd Reagan, David Gray, D.J. Young, Betty Thompson, Nancy Bateman, Roy Williams, and James Lynch, Appellants, v. CITY OF DALLAS, Appellee.

No. 05-01-01579-CV.

Court of Appeals of Texas, Dallas.

June 6, 2002.

James B. Blackburn, Blackburn Carter P.C., Houston, for Appellants.

Orrin L. Harrison, III, Eric T. Stahl, Vinson & Elkins, L.L.P., Dallas, for Appellee.

Leroy L. Denooyer, Asst. City Atty., Dallas, for Appellee.

Before Justices JAMES, O'NEILL, and FRANCIS.

OPINION

Opinion By Justice FRANCIS.

This appeal involves the issuance and expenditure of $246 million in general obligation bonds approved by City of Dallas ("City") voters to develop the Trinity River Corridor Project. Taxpayers for Sensible Priorities and ten citizens challenge the trial court's summary judgment in the City's favor, arguing fact issues exist on whether the City has breached its contract with voters by making various changes to the project.

We must decide whether (1) the contract is the bond proposition itself or whether the contract also includes extraneous documents printed and distributed by City staff but not approved by the City Council, (2) the City has shown, as a matter of law, that it has not breached the contract, and (3) appellants may now challenge the validity of the 1998 bond election.

For the reasons set out below, we conclude the bond proposition itself is the contract between voters and the City, and extraneous documents not approved by the City Council do not form any part of that contract. Further, we conclude the City has established, as a matter of law, that it has not breached the contract. Finally, we conclude appellants' challenge to the bond election is time-barred. Accordingly, we affirm the trial court's summary judgment.

In February 1998, the Dallas City Council passed an ordinance calling for a special election for voters to decide eleven different bond proposals. One of these proposals, Proposition 11, dealt with the Trinity River Corridor Project and is the subject of this dispute. Proposition 11 asked voters:

Shall the city council of the city of Dallas, Texas, be authorized to issue general obligation bonds of the city in the aggregate principal amount of $246,000,000 for the purpose of providing funds for permanent public improvements, to wit: developing, constructing, and acquiring the Trinity River Corridor Project, including floodway extension and flood reduction and control improvements, levees and related street and road improvements, including the City's share of the costs of the Trinity Parkway, lakes, waterways, open space and recreational facilities, and other facilities, improvements and equipment necessary and incidental thereto; said bonds to mature serially over a period not to exceed twenty (20) years from their date, to be issued in such installments and sold at any price or prices and to bear interest at any rate or rates as shall be determined within the discretion of the city council under laws in effect at the time of issuance, and to provide for the payment of the principal of and interest on said bonds by levying a tax sufficient to pay the annual interest on and to create a sinking fund sufficient to redeem said bonds as they become due?

Consistent with Proposition 11, the language on the ballot asked voters to approve:

THE ISSUANCE OF $246,000,000 GENERAL OBLIGATION TRINITY RIVER CORRIDOR PROJECT BONDS, THE PROJECT TO INCLUDE FLOODWAYS, LEVEES, WATERWAYS, OPEN SPACE, RECREATIONAL FACILITIES, THE TRINITY PARKWAY AND RELATED STREET IMPROVEMENTS, AND OTHER RELATED, NECESSARY, AND INCIDENTAL IMPROVEMENTS TO THE TRINITY RIVER CORRIDOR.

The City Council did not pass any other ordinance or resolution describing the project. However, City staff developed, printed and distributed a pamphlet entitled "1998 Capital Bond Program Summary In-Brief." The pamphlet bore the official City seal, contained the names of the Dallas City Council members and the district each represented, and summarized each of the eleven separate bond propositions. With respect to Proposition 11, the pamphlet described the Trinity River Corridor Project as the City's share of "interdependent projects, to be implemented over 10 years, that will leverage over one billion dollars in state, federal, and other agency funds." The pamphlet broke down the project into five anticipated components and allocated amounts to each component: (1) Dallas Floodway Extension, $24.7 million; (2) Elm Fork Levee, $30 million; (3) Transportation Improvements, $118 million; (4) Great Trinity Forest, $41.8 million; and (5) Chain of Lakes, $31.5 million. The pamphlet further provided fairly detailed descriptions of each of the categories.

In addition to the pamphlet, City staff also distributed two other documents at community meetings held before the bond election: a single-paged document entitled "Year in Review Update March 1998" ("March Update") and a two-paged document entitled "Trinity River Corridor Projects" ("Corridor Projects"). Both documents, like the pamphlet, bore the official City seal and allocated amounts for various components of the project. These documents, however, did not provide the more detailed descriptions of the components offered by the pamphlet.

On May 2, 1998, a majority of voters passed Bond Proposition 11. Later that year and again in 1999, the City sold a total of $46 million of the bonds into the public securities markets and began initial work on the project. In December 2000, appellants filed their original petition and application for permanent injunction against the City, alleging the City had unlawfully changed the project from the way it was represented to voters in the pamphlet. In particular, they complained the size, cost, and length of time of the project "changed radically" because it was going to cost more than $500 million and be built in two phases, instead of one. Additionally, appellants made specific complaints about changes to four of the five components set out in the pamphlet: Elm Fork Levee, Chain of Lakes, Great Trinity Forest, and transportation improvements. Appellants sought an injunction (1) requiring the City to "accomplish the project components and to do so for the amounts the voters approved," and (2) prohibiting the City from spending the money in a "manner different from the design approved by the voters."

In response, the City filed an original petition for expedited declaratory judgment under chapter 1205 of the Texas Government Code ("Expedited Declaratory Judgment Act"). The City sought a judgment declaring, among other things, that it (1) is authorized to issue the Proposed Trinity River Bonds in installments and, once issued according to proper procedure, the bonds are lawful and valid obligations and contracts of the City, (2) is authorized to expend the bond funds "for any purposes stated and described" in the bond proposition, and (3) can change or amend the ordinances authorizing the bonds "as may be necessary or appropriate." The City also sought to permanently enjoin any proceeding contesting the validity of the Proposed Trinity River Bonds. The trial court consolidated the two lawsuits.

Thereafter, the City filed a motion for summary judgment to confirm the "legality and validity" of the Trinity River Corridor Project bonds. In its motion, the City asserted two basic propositions: (1) its contract with voters is the bond proposition, not the pamphlet or "any other representation made by City staff or individual officials," and (2) it had been "absolutely faithful" to the bond proposition. Additionally, the City contended appellants' "election contest" is time-barred. Various affidavits and other documentary evidence supported the motion.

In their response to the motion, appellants contended the pamphlet and other documents form part of the contract with voters. They contended material fact issues exist as to whether the changes implemented by the City constitute a breach of contract. Also, appellants argued that, although Texas law allows changes to be made if the contract is not "arbitrarily ignored and repudiated," the City presented no evidence "that conditions have materially changed" since the bonds were voted. Finally, they argued the City's lawsuit brought into issue the legality and validity of the bonds and they were therefore entitled to litigate their complaint that the bond proposition was improperly "multifarious," despite time limitations on such complaints set out in the Texas Election Code. As with the City, various affidavits and documents supported appellants' response.

The trial court ultimately ruled in the City's favor. The judgment declared, among other things, that (1) Bond Proposition 11 constitutes a valid contract with the voters and the external publications "do not impose binding obligations" on the City; (2) the previously issued 1998 and 1999 Trinity River Bonds are legal and valid obligations, and the City's prior expenditure of funds from these bonds is lawful, valid, and authorized by law; (3) the City is authorized to issue the remaining $200 million in bonds, and when issued and executed in accordance with law, the bonds constitute lawful and valid obligations and contracts of the City. This appeal ensued.

This Court reviews a summary judgment de novo to determine whether a party's right to prevail is established as a matter of law. Foreness v. Hexamer, 971 S.W.2d 525, 527 (Tex.App.-Dallas 1997, pet. denied). When reviewing a traditional summary judgment, we apply well-known standards. See TEX.R. CIV. P. 166a(c); McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex.1993); Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 23 (Tex.1990); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985); Orozco v. Dallas Morning News, Inc., 975 S.W.2d 392, 394 (Tex.App.-Dallas 1998, no pet.)....