551 S.W.3d 755
Tex. App.2017Background
- The Hays Street Bridge Restoration Group (the Group) and the City executed a 2002 Memorandum of Understanding about fundraising and uses of funds for restoring the Hays Street Bridge; the Group agreed to raise matching funds (cash and in-kind) and the City agreed to ensure those funds go to the City budget for the project.
- The Group sought to include development of a nearby 1.7-acre Cherry Street Property into a park as part of the broader restoration efforts; the Dawsons donated the Cherry Street Property to the City in 2007, and the City later sold it to a private company.
- The Group sued the City for breach of the Memorandum, seeking only specific performance (to require park development) and a declaratory judgment that the sale violated Tex. Loc. Gov’t Code § 253.001(f); the City asserted governmental immunity in a plea to the jurisdiction.
- The trial court denied the City’s plea and directed verdict motion; a jury found the Memorandum was an agreed contract, included in-kind contributions, covered the Cherry Street Property, and that the City breached; the court ordered specific performance.
- On appeal the City argued: (1) the Local Government Contract Claims Act (the Act) did not waive immunity for claims seeking specific performance, so the court lacked jurisdiction; and alternatively (2) the Memorandum was not a contract or the evidence was legally insufficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Act waived immunity for a breach-of-contract claim seeking specific performance | The Act waives immunity for contract claims; specific performance is available here | The Act does not waive immunity for suits seeking specific performance because §271.153 does not permit that remedy (except later amendments re: reclaimed water) | No waiver; immunity not waived for specific performance claims under the Act in effect when suit filed; dismissal for want of jurisdiction |
| Whether remand for repleading to plead proprietary function was required | Group argued Wasson and proprietary function could avoid immunity and asked opportunity to amend | City argued the Memorandum involved governmental functions and additional pleading would not cure jurisdictional defect | No remand; court held Memorandum obligations were governmental (bridge/community development) and pleadings could not cure jurisdictional defect |
| Whether the Memorandum constituted an enforceable contract (alternative issue) | Group asserted parties agreed to terms and it was a valid written contract | City argued Memorandum was not a contract as a matter of law | Not reached as dispositive jurisdictional ruling resolved case; court declined to address remaining issues |
| Whether the Group suffered recoverable damages within Act’s limits | Group sought only specific performance; earlier pleadings referenced monetary damages but not pressed on appeal | City argued recoverable remedies under §271.153 limited to certain monetary damages, not specific performance | Held that remedies sought were outside §271.153 limitations; therefore immunity remained intact |
Key Cases Cited
- Zachry Constr. Corp. v. Port of Houston Auth. of Harris Cnty., 449 S.W.3d 98 (Tex. 2014) (waiver under §271.152 is limited by the damages authorized in §271.153)
- IT-Davy, Inc. v. Glass, 74 S.W.3d 849 (Tex. 2002) (legislative waiver of immunity must be clear and unambiguous)
- Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) (municipal immunity: governmental vs. proprietary function distinction)
- Wasson Interests, Ltd. v. City of Jacksonville, 489 S.W.3d 427 (Tex. 2016) (city not immune for proprietary acts; discussed applicability to contract claims)
- Tex. A & M Univ. Sys. v. Koseoglu, 233 S.W.3d 835 (Tex. 2007) (jurisdictional defects that cannot be cured by repleading justify dismissal)