City of New Braunfels, Texas v. Carowest Land, Ltd.
2014 Tex. App. LEXIS 4617
| Tex. App. | 2014Background
- Carowest conveyed a strip (Original Channel Tract) to New Braunfels for a flood‑control project; later disputes arose about rerouting the channel and ownership/use of excavated fill.
- In May 2009 the City’s contractor removed over 15,000 cubic yards of fill from the Original Channel Tract; Carowest claims it had an option/contract right to that fill and sought its value.
- The parties executed a June 27, 2009 Letter Agreement and related instruments (development agreement, easements, deed) that modified rights and obligations related to the channel, fill, and a 5–6 acre conveyance for NBU expansion.
- Relations soured: Yantis asserted delay claims against the City tied to work on Carowest’s property; the City sought indemnity from Carowest and later awarded Yantis a separate contract that Carowest alleges was quid pro quo for release of the delay claim.
- Carowest sued the City asserting (a) inverse condemnation (takings) and §1983 claims for the removed fill, (b) common‑law torts and breach‑of‑contract claims tied to the Letter Agreement and later conduct (including alleged concealment regarding Yantis), and (c) declaratory relief under the UDJA, Open Meetings Act, and Local Government Code chapter 252. The district court denied the City’s plea to the jurisdiction; the court of appeals reviews that denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Viability of takings claim for removed fill | Carowest: had contractual option/ownership of fill; City’s removal was a compensable taking | City: Carowest conveyed the tract and dispute over fill was contractual; City acted under color of contract, not sovereign power | Reversed/dismissed: takings claim fails because City acted in contractual capacity; no viable constitutional taking |
| §1983 (due process/equal protection) claims tied to fill and post‑agreement conduct | Carowest: City acted under color of state law to deprive rights; alleges broader coercive/fraudulent conduct re Yantis | City: §1983 claims are subsumed by the (nonviable) takings claim and otherwise lack distinct constitutional interest | Reversed and remanded: §1983 claims dismissed for now but Carowest may be allowed to amend to plead non‑subsumed constitutional claims |
| Common‑law contract and tort claims (money damages) | Carowest: City breached Letter Agreement and related contracts; torts arise from City’s post‑agreement conduct and Yantis indemnity issues | City: Governmental immunity bars these claims | Affirmed in part: district court has jurisdiction over contract/tort claims to the extent they fall within chapter 271.151–153 waiver and/or as offsets to City’s affirmative monetary counterclaim |
| Declaratory relief (Open Meetings Act, chapter 252, validity of Yantis claim) | Carowest: statutory waivers (OMA; Local Gov’t Code ch. 252) create jurisdiction to declare City actions void; Yantis issue is tied to contract/indemnity rights | City: UDJA claims are barred by immunity or Carowest lacks standing under chapter 252; some claims moot | Affirmed: UDJA declaratory claims survive—OMA and chapter 252 provide waivers; standing/fact issues resolved against City; Yantis declaratory claim also within court’s jurisdiction given contract waiver and counterclaim jurisdiction |
Key Cases Cited
- A.P.I. Pipe & Supply, LLC v. Texas Dep’t of Transp., 397 S.W.3d 162 (Tex. 2013) (distinguishes when takings claims evade immunity and need ownership interest)
- Little‑Tex Insulation Co., Inc. v. State, 39 S.W.3d 591 (Tex. 2001) (government acts in two capacities—sovereign vs. private—relevant to takings analysis)
- Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. 2006) (governmental entity’s assertion of affirmative monetary claims can limit immunity as to offsetting defensive claims)
- Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (describes governmental immunity and proprietary‑governmental distinction)
- Ben Bolt‑Palito Blanco Consol. Indep. Sch. Dist. v. Texas Political Subdiv. Prop./Cas. Joint Self‑Ins. Fund, 212 S.W.3d 320 (Tex. 2006) (Local Government Code chapter 271 subchapter I is a clear waiver of immunity for certain contract suits)
- Albert v. City of Dallas, 354 S.W.3d 368 (Tex. 2011) (clarifies ‘‘germane to, connected with, and properly defensive’’ standard for offset jurisdiction)
- Miranda v. Texas Dep’t of Parks & Wildlife, 133 S.W.3d 217 (Tex. 2004) (standard of review for plea to the jurisdiction and when factual disputes preclude dismissal)