Triple BB, LLC v. Vill. of Briarcliff, 03-17-00149-CV

• Citation: 566 S.W.3d 385
• Decision Date: 21 December 2018
• Docket Number: NO. 03-17-00149-CV,03-17-00149-CV
• Parties: TRIPLE BB, LLC, Appellant v. The VILLAGE OF BRIARCLIFF, Texas, Appellee
• Court: Court of Appeals of Texas

566 S.W.3d 385

TRIPLE BB, LLC, Appellant

v.The VILLAGE OF BRIARCLIFF, Texas, Appellee

NO. 03-17-00149-CV

Court of Appeals of Texas, Austin.

Filed: December 21, 2018

Mr. Bradley B. Clark, Bradley B. Clark Law Group, P.C., Austin, TX, for Appellant.

Mr. Kenton P. Campbell, Burns Anderson Jury & Brenner, LLP, Austin, TX, for Appellee.

Before Justices Puryear, Field, and Bourland

ON MOTION FOR REHEARING

OPINION

Cindy Olson Bourland, Justice

We withdraw the memorandum opinion and judgment dated August 15, 2018, substitute the following opinion and judgment in their place, and deny Triple BB’s motion for rehearing.¹

Triple BB, LLC, appeals from an order of the district court granting the plea to the jurisdiction filed by the Village of Briarcliff, Texas (the Village). The underlying litigation concerns Triple BB’s asserted right to keep a billboard on cliffside property owned by Malcolm Phillips in the Village. The Village asserted in its plea to the jurisdiction that Triple BB had failed to establish a waiver of the Village’s governmental immunity from suit. In its live pleading, Triple BB asserted claims against the Village for a prescriptive easement, breach of contract, and inverse condemnation, and sought declaratory relief nullifying a contract with the Village concerning the billboard. For the reasons that follow, we will affirm the district court’s order granting the Village’s plea to the jurisdiction.

BACKGROUND

The Village is a municipality located on the shores of Lake Travis. Over three decades ago, the Briarcliff Marina erected a billboard attached to a cliffside property lot in the Village:

The billboard is located on Lot 268A, directly below Lot 268, on Briarcliff Drive. The Village owned Lot 268A at the time of the placement and for several decades afterwards.

In 2002, the Village entered into a contract with James and Linda Clendenin, then owners of the Marina. Their agreement consisted of a Master Agreement, which laid out the basic terms of the contract; an Easement Agreement; and two license agreements (collectively, the Contract). Under the Contract, the Marina granted the Village an easement across the Marina’s land to install and maintain a raw water line along the route of a preexisting line. The Marina also agreed to modify the location of a separate easement granting the Marina access to a roadway. In return, the Village granted "to the Marina, its successors and assigns" a license to display the billboard on Lot 268A and agreed to repair the Marina’s parking lot at the Village’s expense.²

Three years later, the Clendenins sold the Marina and all their interest in the Contract to Triple BB.³ The Village subsequently conveyed Lot 268A to Richard and Shirley Flowers, the owners of Lot 268. The deed from the Village to the Flowerses is silent as to the billboard or the license granted in the Contract. In 2011, the Flowerses sold Lots 268 and 268A to Phillips who, in turn, demanded that Triple BB remove the billboard.

Triple BB filed suit against Phillips seeking a declaration of its rights under the Contract, a permanent injunction to keep the billboard in place, and an award of attorney’s fees. Phillips filed a motion for summary judgment arguing that the license agreement covering the billboard (the License Agreement) was unenforceable against him. Before the district court ruled on Phillips’s motion, Triple BB added the Village as a defendant and asserted the same claims. The district court subsequently granted Phillips’s motion for summary judgment, in effect deciding that Phillips did not have to allow Triple BB to display the billboard. The Village then filed a plea to the jurisdiction asserting that Triple BB had failed to establish a waiver of its governmental immunity.

Triple BB responded by amending its pleadings to assert that it acquired a prescriptive easement to display the billboard that is binding on Phillips. In addition, Triple BB asserted that the Village breached the Contract by failing to convey Lot 268A subject to Triple BB’s license and that the Village therefore took Triple BB’s property—the land subject to the raw water line easement—without compensation in violation of the Texas Constitution. Triple BB also sought declaratory relief based on its alternate theory that the Contract was void for failure of consideration. The district court granted the Village’s plea to the jurisdiction. This interlocutory appeal ensued. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(8) (conferring jurisdiction over interlocutory appeal of order granting or denying plea to jurisdiction filed by governmental unit).

STANDARD OF REVIEW

Governmental immunity has two components: immunity from suit and immunity from liability.⁴

Tooke v. City of Mexia , 197 S.W.3d 325, 332 (Tex. 2006). Governmental immunity from suit deprives a court of subject matter jurisdiction over claims against political subdivisions of the state, including cities, absent legislative waiver. Id. And if the legislature elects to waive immunity, it must do so by clear and unambiguous language. Nazari v. State , 561 S.W.3d 495, 499–501, No. 16-0549, 2018 WL 3077659, at *3 (Tex. June 22, 2018) (citing Tex. Gov't Code § 311.034 ). Immunity from suit implicates a court’s subject matter jurisdiction and is properly asserted in a plea to the jurisdiction. Harris Cty. v. Annab , 547 S.W.3d 609, 612 (Tex. 2018).

Whether a court possesses subject matter jurisdiction is a question of law that we review de novo. Id. We begin our analysis by examining the plaintiff’s live pleadings to determine if it alleges facts that affirmatively demonstrate subject matter jurisdiction. Alamo Heights Indep. Sch. Dist. v. Clark , 544 S.W.3d 755, 770 (Tex. 2018). We construe the plaintiff’s pleadings liberally, take all factual allegations as true, and look to the plaintiff’s intent. Houston Belt & Terminal Ry. Co. v. City of Houston , 487 S.W.3d 154, 160 (Tex. 2016). We may also consider evidence relevant to jurisdiction and must do so when necessary to resolve the jurisdictional issue. Heckman v. Williamson Cty. , 369 S.W.3d 137, 150 (Tex. 2012).

DISCUSSION

Triple BB asserts in a single issue that the district court erred in granting the plea to the jurisdiction because governmental immunity does not protect the Village from its claims.

Proprietary or Governmental Function

Triple BB initially argues that governmental immunity does not apply at all because the Village contracted with the Marina in its proprietary capacity.

Governmental immunity shields municipalities such as the Village from suits arising from performance of their "governmental" but not "proprietary" functions. City of Austin v. Utility Assocs. , 517 S.W.3d 300, 307 (Tex. App.—Austin 2017, pet. denied) ; see Wasson Interests, Ltd. v. City of Jacksonville , 489 S.W.3d 427, 439 (Tex. 2016) [ Wasson I ] (holding that distinction between governmental and proprietary acts "applies in the contract-claims context just as it does in the tort claims context"). Courts distinguish between governmental and proprietary functions because cities have no inherent immunity but derive their immunity from the state. City of Houston v. Williams , 353 S.W.3d 128, 134 (Tex. 2011). As a result, "a city is cloaked in the state’s immunity when it acts as a branch of the state, but only when it acts as a branch of the state."⁵ Wasson I , 489 S.W.3d at 436.

The distinction between governmental and a proprietary functions "has not been a clear one," and determining whether a particular activity is governmental or proprietary "is not always a cut-and-dried task." Id. at 438 (citing Tooke , 197 S.W.3d at 343 ). Generally speaking, a city’s governmental functions are those acts its performs "as the agent of the state in furtherance of general law for the interest of the public at large." Id. at 436 (quoting City of Houston v. Shilling , 150 Tex. 387, 240 S.W.2d 1010, 1011-12 (1951) ). Proprietary functions, in contrast, are those "performed by a city, in its discretion, primarily for the benefit of those within the corporate limits of the municipality." Id. at 433-34 (quoting Gates v. City of Dallas , 704 S.W.2d 737, 739 (Tex. 1986) ).

Courts were traditionally left to determine whether a function is governmental or proprietary, but the legislature now has constitutional authority to "define for all purposes those functions of a municipality that are to be considered governmental and those that are proprietary, including reclassifying a function’s classification assigned under prior statute or common law." Tex. Const. art. XI, § 13 (a). The legislature exercised that authority by enacting the Texas Tort Claims Act (TTCA) and reclassifying certain proprietary functions as governmental. See Tex. Civ. Prac. & Rem. Code § 101.0215 ; see also City of Tyler v. Likes , 962 S.W.2d 489, 503 (Tex. 1997) (noting that TTCA reclassified maintenance of storm sewers as governmental even though it was considered propriety at common law). The TTCA applies to tort claims, but courts determining whether immunity applies in the contract-claims context "should be guided ... by the TTCA’s treatment of the proprietary-governmental distinction." Wasson I , 489 S.W.3d at 439.

Courts determine whether immunity applies in this context by examining "whether the municipality was engaged in a governmental or proprietary function when it entered the contract, not when it allegedly breached the contract." Wasson Interests, Ltd. v. City of Jacksonville , 559 S.W.3d 142, 149 (Tex. 2018) [ Wasson II ]. Triple BB argues that we should focus solely on the license agreement covering the billboard on Lot 268A because that is "[t]he central agreement at issue here." However, we cannot isolate the license agreement from the remainder of the Contract because the Master Agreement expressly incorporates all of the ancillary agreements, including the License Agreement. See, e.g. , In re 24R, Inc. , 324 S.W.3d 564, 567 (Tex. 2010) (orig. proceeding) (per curiam) ("Documents...